One of the most important lessons every investor learns sooner or later is that the past doesn’t necessarily predict the future. If a company stock has been amazing in the past, it’s not a guarantee that it will continue that streak in the future as well. There are simply too many variables, and the market changes far too rapidly for past performance to become a definitive indicator and predictor for the future performance of the stock.
Ironically, it’s one of the best predictors we have. We can’t predict how the market as a whole will be like in the next five, 10, or 15 years, but we can hope that the fundamentals that have pushed a business to its current level of success might help it navigate the complexities of an unknown future as well, and keep succeeding.
With that in mind, there are three stocks that should be on your radar if you are looking for securities you can hold for the next fifteen years.
A software company
Constellation Software’s (TSX:CSU) monstrously high price tag (over $2,150 at the time of writing) is a very common barrier to entry for many retail investors, and it’s easy to see why. If you consider putting this company in your Tax-Free Savings Account (TFSA), you can’t even buy three full shares using the entire contribution room for a year ($6,000). But it’s imperative that you learn to see beyond this barrier.
Fractional shares have been around for ages, and they are a boon for investors who are trying to buy up security as expensive as constellation software. You can buy up as many “fractions” of the company as you wish (at a denomination that you are comfortable with) and keep only the fundamentals in mind.
The stock’s stellar growth history and its marvelous 10-year compound annual growth rate (CAGR) of 43.8% make it must-have security for long-term investors, even at its brutally expensive valuation.
An alternative finance company
Relatively few TSX stocks can match Constellation’s growth consistency and rate, and goeasy (TSX:GSY) is one of those few. And it’s currently available at a much more attractive price. After returning over 800% to its investors in the last five years, thanks mostly to the post-pandemic growth, the stock is still trading at a price-to-earnings of just 15.2. The price-to-book is high (4.5), but even that’s not nearly as expensive as a stock with its growth streak can be.
The 10-year CAGR of 43% makes it a powerful growth holding. However, it’s recommended that you wait for the stock to normalize a bit. It’s one of the few TSX stocks that haven’t gone through a correction (post-pandemic) yet and are still riding the recovery momentum. It’s also a Dividend Aristocrat and very generous with its dividend growth.
A renewable power company
Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) is worth holding on to for the next fifteen years (possibly even more) not because of its growth history or dividends but because of the nature of its business. It’s one of the largest pure-play renewable power companies in the world. The company invests only in natural gas, and the portfolio consists of power generation sources that rely on water, wind, solar, and power storage facilities.
Its ESG profile is stellar, and even though the company might not be as profitable now as it has the potential to be, it will most likely be a profitable cash cow in the coming decades. Its geographically diversified portfolio makes it even more attractive as different regions embrace clean power at different paces, which broadens the window the company will have to capitalize from the green energy boom.
Even if you invest one year’s TFSA contributions in the three companies and forget about them, you can expect a decent-sized nest egg after 15 years. CSU and goeasy’s growth consistency and powerful growth pace, along with BEP’s brewing growth potential, might be enough to push your TFSA closer to your ideal retirement sum.