Got $5,000? Buy These 2 Stocks and Hold Until Retirement

There are some stellar stocks to buy now and hold until retirement. Here’s a look at two options if you have $5,000.

| More on:
Path to retirement

Image source: Getty Images

Looking for that perfect mix of investments? Whether you have $5,000 or $500,000, there are some stellar stocks to buy now and hold until retirement.

Here’s a look at two great options that would do well in any well-diversified portfolio.

Hold until retirement: Fortis

Fortis (TSX:FTS)(NYSE:FTS) is a stock that should be on the radars of investors everywhere. The company operates a growing utility network that is scattered across the U.S., Canada, and the Caribbean. Collectively, the company boasts over $60 billion in assets and over 3.4 million utility customers.

As one of the largest utilities on the continent, Fortis benefits from its very defensive business model.

In short, Fortis is contracted to provide utility services. For as long as Fortis keeps providing that service, it receives a steady revenue stream. Those contracts are regulated and very long term, typically spanning decades.

For investors, this means that Fortis generates a stable, recurring revenue stream that allows the utility to pay a handsome dividend to investors. The yield on that dividend works out to a juicy 3.52%.

So then, why should you buy Fortis and hold until retirement?

Fortis is a great buy-and-forget stock. Additionally, Fortis has provided annual generous upticks to that dividend for 48 consecutive years. Even better, Fortis has no plans to stop that practice either.

In short, a $5,000 investment today that investors hold until retirement will generate a solid income for investors. Over the course of 20 years, that initial investment can grow into a sizable nest egg.

Prospective investors should also note that Fortis is investing heavily in both upgrading and transitioning its facilities towards renewable energy.

You can bank on growth for decades

When it comes to stocks with decades of staying power, it’s hard not to mention one of the big banks. In fact, Canada’s big banks remain some of the best long-term options on the market today. But which bank is right for your portfolio and to hold until retirement?

That would be Bank of Montreal (TSX:BMO)(NYSE:BMO). BMO is neither the largest or most renowned of the big banks. What it does offer investors is a trio of factors that make the bank a must-have for any portfolio.

First, let’s talk about consistency. BMO is the oldest bank in Canada, even pre-dating confederation. Nearly two centuries of growth has allowed the bank to amass a mature domestic network that generates impressive earnings for the bank.

That bump in earnings allows BMO to invest in other areas, such as growth. A great example of that is BMO’s US$16.3 billion deal to acquire the Bank of the West. The deal was announced late last year and, upon completion, will expand BMO’s presence into several new state markets.

More importantly, Canadian banks are known for their stability and ability to completely avoid the crises that plague U.S. banks every decade. In short, BMO’s presence in new markets like California may be a boon to the bank.

Finally, let’s talk dividends. BMO offers investors a juicy quarterly dividend. The current yield works out to 4.12%, making it one of the better-paying returns on the market. As with Fortis, reinvesting those dividends and holding until retirement is key.

This will allow the maximum return on your initial investment, even if it is just $5,000.

Final thoughts

No stock is without risk. As we’ve seen in 2022, market volatility is always nearby. Fortunately, both BMO and Fortis boast significant defensive appeal. So far in 2022, both are trading near flat or just slightly below where they finished in 2021.

This means that one or both are great long-term options for any well-diversified portfolio. In short, buy them and hold until retirement.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has positions in Fortis Inc. The Motley Fool recommends FORTIS INC.

More on Dividend Stocks

Going against the grain
Dividend Stocks

Contrarian Investors: 2 Discounted High-Yield Dividend Stocks for Passive Income

These top TSX dividend stocks now have 7% dividend yields.

Read more »

Dividend Stocks

Bank of Canada Rate Cuts: Best Stocks to Buy Right Now

These are the best stocks to buy with interest rates coming down. Don't just save money; start making it, too!

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

2 of the Top Dividend Stocks in Canada

Here are two of the best buy-and-hold-forever dividend stocks in Canada you can bet on.

Read more »

A meter measures energy use.
Dividend Stocks

2 Utility Stocks That Benefit From Interest Rate Cuts

Further rate cuts could mean a healthy rise in share price for these two undervalued utility stocks.

Read more »

You Should Know This
Dividend Stocks

Goldilocks Markets and Record Highs: What Investors Need to Know

Right now, conditions are "just right" for a "Goldilocks" market, so here's what investors need to know and where to…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Avoid These TFSA Pitfalls to Keep More of Your Money

Investors continue to make many mistakes in a TFSA, so let's look at how to overcome them with these tips,…

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Beat the TSX With These Cash-Gushing Dividend Stocks 

The TSX is a gold mine for dividend stocks. You can find 6% yield stocks that even grow their dividend…

Read more »

Golden crown on a red velvet background
Dividend Stocks

These 5 Stocks Have Unstoppable Dividend Growth

These five stocks can form a diversified stock portfolio of dividend aristocrats from the TSX.

Read more »