Many investors make the mistake that once they buy TSX stocks, they can’t wait for them to appreciate so that they can sell for a profit. However, while the golden rule of investing is to buy low and sell high, the best investments are stocks with the potential to grow so well and consistently that you plan to hold them for several decades.
When you find a high-quality business, you don’t want to own it for only a few years. Instead, you want to hold that stock for as long as it can dominate its industry and grow at an attractive pace.
Of course, things can change down the road, and you may have to sell one day. However, for the most part, the goal of investors should be to find stocks that are so attractive that you can plan to hold them forever.
Furthermore, trading these stocks year in and year out can be challenging. It’s extremely tough to predict where the market is going in the short run.
Instead, you’re better off building a position over the years; buying these TSX stocks now and adding to them periodically as your cash position grows when they temporarily trade at attractive valuations.
So with that in mind, here are three of the best businesses in my portfolio that I never plan on selling.
A top TSX telecom stock that you can own for decades
One of the top TSX stocks I hold in my portfolio and one of the best blue-chip stocks in Canada is BCE (TSX:BCE)(NYSE:BCE).
There are several reasons BCE is a core portfolio stock, and one I don’t think I’ll ever sell. First off, BCE operates in an industry that’s essential. Having access to communications and the internet is critical and only continues to get more important as our technology develops.
Therefore, in addition to the fact that the industry isn’t going anywhere, it actually continues to become more essential and, therefore, more defensive every day.
In addition, there are only a few dominant companies in the industry. And BCE is one of them, plus it’s also the largest. And on top of BCE’s communication services from its wireline and wireless segments, the stock also owns media assets, which give it a tonne of attractive synergies that allow it to cross-sell and better market its products.
Another reason BCE is one of the top TSX stocks to buy and hold for years is that it owns long-life assets, allowing the stock to bring in billions in cash flow constantly. Therefore, the stock is not just growing its operations but is also constantly returning capital to investors and increasing its dividend, which today offers a yield of 5.7%.
A top defensive growth stock
Some of the best TSX stocks to buy and hold for the long haul are defensive companies offering attractive long-term growth potential. That’s why another one of the stocks I don’t think I’ll ever sell is Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP).
Brookfield owns a portfolio of highly defensive assets that are diversified all over the world. This diversification helps to reduce risk. However, it also exposes Brookfield to more opportunities to find undervalued assets.
The reason it’s such an attractive growth stock is that the company is always recycling capital to invest in new opportunities. In addition, management uses its expertise to improve its current assets to create more organic growth potential.
And with the stock having a stated goal of increasing its distribution each year by 5% to 9%, it’s undoubtedly one of the best TSX stocks to buy and hold for years.
A top TSX utility stock
Lastly is Algonquin Power and Utilities (TSX:AQN)(NYSE:AQN), another defensive stock offering attractive long-term growth potential.
Algonquin offers resiliency and earns consistent cash flow because of its utility operations. However, it also has a tonne of long-term growth potential due to its green energy segment. Furthermore, the stock has just begun employing a capital recycling program similar to Brookfield.
This capital recycling will see Algonquin sell off its more mature green energy assets, which can fetch higher valuations, and then use the proceeds to reinvest that capital into earlier stage projects which are cheaper and offer more value.
As the clean energy transition gains momentum, AQN is one of the top TSX stocks to buy and hold for years to come.