Got $2,500? 2 Top Stocks That You Can Buy and Hold for a Lifetime

The market is full of opportunities, including these two stocks you can buy and hold forever.

| More on:
Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance

Image source: Getty Images

Every investor seeks to earn a solid income. Unfortunately, new investors often lack the $40,000 or more needed to establish that income stream. Fortunately, there are options for those investors. Here are two stocks to buy and hold for a lifetime that can start you off, with just $2,500.

Fortis provides ample buy-and-hold potential

The first investment that is a buy-and-hold for a lifetime is Fortis (TSX:FTS). Fortis is one of the largest utilities on the continent. The company has 10 operating regions that include facilities scattered across the U.S., Canada, and the Caribbean.

Utilities are among the most defensive investments on the market. Part of that appeal stems from the regulated nature of the business. In short, Fortis generates a stable and recurring revenue stream that is bound by long-term regulatory contracts.

Also worth noting is that the defensive appeal of that stable revenue stream is largely unaffected by market volatility. This makes Fortis one of the most defensive options on the market, and a great reason to buy and hold for a lifetime.

Turning to results, the most recent set of results was for the third fiscal back in October. In that quarter, Fortis reported net earnings of $326 million, or $0.68 per common share. This was a noted increase over the $295 million, or $0.63 per common share reported in the same period last year.

Overall, the company earned $0.71 per common share, reflecting a $0.07 per common share increase.

The solid results and stable revenue stream also mean that Fortis can provide a juicy dividend to investors. Fortis provides an appetizing quarterly income stream, which works out to a yield of 4.19%. This means that a $2,500 investment will earn just over $100 in income. That’s obviously not enough to retire on, but it is enough to let those reinvested dividends begin to grow your portfolio.

If that’s not enough, Fortis has an established practice of providing annual bumps to that dividend. That cadence extends to an incredible 49 years. Management’s recent guidance for that annual bump is to continue with 4-6% increases through 2027.

That further justifies Fortis as a buy-and-hold for a lifetime investment.

Banking on growth, pocketing some income

It’s hard to compile a list of investments to buy and hold for a lifetime without mentioning at least one of Canada’s big banks. The big banks are some of the best long-term investments on the market. They regularly provide strong earnings and show long-term growth potential.

The big banks have also provided handsome dividends for over a century, and provide a reliable annual cadence for dividend increases. But which of Canada’s big banks should investors look to?

That bank to consider is Bank of Montreal (TSX:BMO). BMO is Canada’s oldest bank and has been paying out dividends for nearly two centuries. Like its peers, BMO also runs a solid domestic business that generates the bulk of its revenue.

Where BMO differs from its peers is with respect to its international growth. BMO’s expansion into the U.S. market has primarily focused on the Midwest, but that’s changing.

Late last year BMO announced it was buying California-based Bank of the West. The US$16.3 billion deal will add over 500 branches to its growing U.S. network. Those branches will also bring in billions in loan deposits, placing BMO among an exclusive crowd of the 15 largest banks in the U.S.

Investors looking at BMO as a candidate investment to buy and hold for a lifetime won’t be disappointed with the income potential of the stock. BMO’s quarterly dividend is a juicy 4.28%. Like Fortis, a $2,500 investment will provide a dividend that, if reinvested and added to over the years, will provide a nice income.

Buy and Hold for a Lifetime – it’s not a race!

No investment is without risk, and that includes both Fortis and BMO mentioned above. Building out a solid portfolio takes planning, patience, and most importantly, time. In short, start early, even with $2,500, and give your portfolio time to grow.

In my opinion, both Fortis and BMO are worthy long-term options to buy and hold for a lifetime as part of a larger, well-diversified portfolio.

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. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Dividend Stocks

3 Canadian REITs That Pay Out Every Month

$10 can buy you a stake in a REIT that pays monthly distributions yielding 8.2% annually. CT REIT and another…

Read more »

A meter measures energy use.
Dividend Stocks

3 Reasons to Buy Utility Stocks in 2023

Here's why adding utility stocks to your portfolio is a smart idea, as we face significant uncertainty in 2023.

Read more »

Modern buildings in business district
Dividend Stocks

2 Top Residential REITs to Buy in February 2023

These two top residential REITs to buy offer attractive passive income as well as long-term growth potential.

Read more »

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance
Dividend Stocks

TFSA Investors: Make $102/Month Without Lifting a Finger

Here’s an amazing monthly Canadian dividend stock that can help TFSA investors earn reliable passive income for years.

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Dividend Stocks

TFSA Passive Income: Earn $129/Month Tax Free

Do you seek passive income? Leverage your TFSA to earn tax-free passive income via these Dividend Aristocrats.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Invest $23,000 in 2023 to Create Passive Income

Here's how income-generating cash cows such as Canadian Utilities and TC Energy can help you earn over $1,000 in annual…

Read more »

Early retirement handwritten in a note
Dividend Stocks

2 High-Dividend Stocks to Buy Today for Early Retirement

You can buy these two high-dividend Canadian stocks right now to help you plan an early retirement from work.

Read more »

worry concern
Dividend Stocks

Worried About Market Downturn? Buy This High-Yielding (6.3%) Dividend Stock

The stock market has been pretty volatile lately. It’s better to have a balanced portfolio that can perform in every…

Read more »