3 Best-in-Class Stocks to Build Long-Term Wealth

Looking for stocks that might create generational wealth over the long term? Here’s a top growth, value, and income stock to buy now!

| More on:

Image source: Getty Images

There is no get-rich-quick scheme when investing in stocks. Investing takes time, patience, and an iron stomach. Trading stocks to make a quick profit is not investing. It is speculating on prices. Investing is when you buy a stock in a real business and participate in its long-term growth and profits.

Build wealth by owning stocks for the long term

If you want to build long-term wealth, the best thing to do is to find stocks in high-quality companies and own them for the long run. Find companies with great products/services, a solid history of strong returns, smart management, and healthy balance sheets. Buy a mix of top stocks in a variety of sectors and then hold them for years.

Not only is this the simplest strategy, but it is also the least stressful. If you are looking for best-in-class stocks to build long-term wealth, here are three at the top of my list.

A world-class consulting firm

The rising demand for essential infrastructure is a major long-term tailwind for WSP Global (TSX:WSP). It is one of the world’s largest engineering, design, and consulting firms. Since 2012, this stock has earned a 458% total return, or 21.2% annualized.

The company has been very successful acquiring both small and large consulting firms under its platform. It has acquired over 190 firms since its inception. It has made five acquisitions this year, including the notable Wood Environmental purchase for $2.4 billion.

This year, WSP has grown revenues, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) and adjusted net earnings per share by 13%, 12.7%, and 12%, respectively. The company has a huge $13.3 billion backlog, so its outlook remains robust. The company has a strong balance sheet, and it still has excess capacity to keep acquiring firms that can expand its reach geographically and by vertical.

A global asset manager

Over the past 20 years, Brookfield Asset Management (TSX:BAM.A) has grown into a premium alternative asset manager. Today, it has $750 billion of assets under management (and growing). Over the past decade, BAM stock has delivered a 324% total return, or 15% annually. That doesn’t include any spin-outs either.

Speaking of spin-outs, Brookfield is spinning out a 25% stake in its asset management business on Monday. This move is meant to separate its asset-light, fee-heavy business from its large, somewhat complex array of cash-yielding private and public assets.

This move could unlock long-term value, because it helps make the broader Brookfield organization more transparent to analyze. Beyond this, BAM has an incredibly smart value-focused management team. It has $125 billion of spare capital to deploy, so it has ample opportunities to grow in the coming years.

An income stock to hold for years

If you want an intriguing combination of stable growth, value, and income for years to come, Granite REIT (TSX:GRT.UN) should be on your radar. This dividend stock has earned a 180% return, or 10.8% annually, since 2012.

With a market cap of $4.85 billion, Granite is Canada’s largest industrial properties real estate stock. It has institutional grade assets in Canada, the U.S., and Europe. The real estate investment trust (REIT) has a very stable portfolio with 99% occupancy, long-term leases, and investment-grade tenants.

This REIT is down 27% this year, and it trades at a 15% discount to its private market value. It also has a nice 4% dividend, which it has consistently grown for 12 consecutive years. This REIT has a top management team and sector-leading balance sheet. You’ll be hard pressed finding a better, low-risk income-yielding stock to hold decades to come.

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 Robin Brown has positions in Brookfield Asset Management, Granite Real Estate Investment Trust, and WSP Global. The Motley Fool recommends Brookfield Asset Management, Granite Real Estate Investment Trust, and WSP Global. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

Woman has an idea
Stocks for Beginners

Just Starting to Invest? 3 Smart Stocks to Buy in February 2023

If you're looking for smart beginner stocks to buy, you could look into asset management companies like Brookfield Asset Management…

Read more »

stock analysis
Stocks for Beginners

The Biggest Market Movers on the TSX in January 2023

Here are the top Canadian stocks that drove the main TSX index up over 7% in January 2023.

Read more »

calculate and analyze stock
Stocks for Beginners

The Top 3 Most Shorted Stocks in Canada Today

These TSX stocks may be up now, but short-sellers are betting they're about to tumble in the next few weeks.

Read more »

Growth from coins
Stocks for Beginners

Got $5,000? These 2 Growth Stocks Are Smart Buys

Are you looking for some smart buys for your portfolio? Here are two great options to buy now while you…

Read more »

Young woman sat at laptop by a window
Stocks for Beginners

3 Stocks Beginners Can Buy in 2023 and Hold for Decades

Are you looking for a simple portfolio to get started as an investor? These three stocks are top performers and…

Read more »

Dividend Stocks

Slow and Steady: Buy this Railroad Stock Now to Win the Race

Investors looking for a solid and growing income should pick up shares in this railroad.

Read more »

A brown bear sitting on a rock
Stocks for Beginners

Where to Invest $10,000 in a Bearish Market

Here are some great options for low-risk and high-risk investors alike.

Read more »

retirees and finances
Dividend Stocks

RRSP Investors: Should You be Worried During a Recession?

RRSP savers might feel like gagging as they watch their investments fall, but stay strong! Especially with these TSX stocks.

Read more »