The Canadian stock market features many outstanding companies. Some of the most established companies in the country could be great stocks to hold over the long term. When looking for stocks that you intend to hold over a long period, investors should note whether that company has a history of leading its industry. Companies that have been able to do so stand the best chance at outlasting competition over the long term. In this article, I’ll discuss three Canadian stocks that would make great long-term picks.
A very important company
Canadian National Railway (TSX:CNR)(NYSE:CNI) is the first stock that I’d recommend that investors consider holding over the long term. This is because Canadian National plays such an important role in the Canadian economy. It leads the Canadian railway industry, as the largest railway operator in the country. Its track covers nearly 33,000 km and spans from British Columbia to Nova Scotia. Importantly, there doesn’t seem to be a viable alternative to the railway industry. This could keep demand for this industry very high over the coming years.
Canadian National has a long history of increasing its dividend. In fact, it has managed to increase dividend distributions in each of the past 25 years. That makes it one of only 11 TSX-listed companies to accomplish the same feat. Over the past five years, Canadian National stock has gained nearly 40% even without accounting for dividends. This is a dominant company with a history of excellence.
Choose one of the banks
Investors should also consider buying shares of one or more of the Big Five banks. This is because the Canadian banking industry is highly regulated. That makes it difficult for new and smaller companies to displace the industry leaders. As a result, the companies leading the Canadian banking industry have been able to establish very formidable moats. Generally, I tend to suggest that Canadians simply buy shares of the bank they do business with. However, if you wanted to choose another one, I’d recommend Bank of Nova Scotia (TSX:BNS)(NYSE:BNS).
The reason I like Bank of Nova Scotia is because of its focus on its international presence. There are two major benefits that I see here. First, this geographic diversification provides the company with stability, should one region be affected by a negative economic event. Second, it provides Bank of Nova Scotia with more opportunities to grow. In fact, in its latest earnings presentation, the company reported that its international business was a major driver of company growth. The Canadian banks are great long-term holds, but Bank of Nova Scotia gets my top mention.
This financial institution is a great stock
Finally, investors should consider buying shares of Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM). Through its subsidiaries, this company operates a portfolio with about $725 billion of assets under management. It has exposure to the infrastructure, real estate, renewable utility, and private equity markets.
Brookfield has been an outstanding stock over the past five years. During that period, the stock has gained nearly 73% even without accounting for its dividend. Speaking of which, Brookfield has managed to increase its dividend in each of the past nine years. That stable dividend should entice prospective investors as well.