4 Incredibly Safe Canadian Stocks to Buy and Hold for Decades

If you want to safely invest by thinking long term, here are four stocks I wouldn’t hesitate to own for years and even decades.

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A very safe way to invest is to buy stocks in high-quality Canadian companies and hold them for decades. The longer term you can think, the less the short-term market fluctuations matter.

The less short-term fluctuations matter, the less investors make irrational sell decisions that could hinder the compounding benefits of long-term investing. If you want to safely invest by thinking long term, here are four stocks I wouldn’t hesitate to own for years and even decades.

A top Canadian utility stock

Fortis (TSX:FTS) is a quintessential Canadian stock if you want longevity. It may not be the highest performing stock on the TSX. However, if you want consistency, prudence, and predictability, it is the stock to hold for decades.

As a diversified electric/gas transmission and distribution utility, its business model is founded in predictability. As a result, the company prudently manages its balance sheet and invests to reliably build incremental value over long periods of time.

One perfect example of this is Fortis’s track record of steady dividends. It has increased its dividend for 49 consecutive years.

If it increases its dividend in 2023 (which is likely), it will hit the admirable “Dividend King” status. Only a few high-quality stocks have hit that status in Canada. Today, this stock yields around 4%. Given its target to grow its dividend by 4-6%, your yield on cost will only grow from here.

A Canadian transportation giant

Canadian National Railway (TSX:CNR) is another blue-chip stock with enduring qualities. Its Canada-U.S. railroad and transportation network is irreplaceable and essential. This business can be economically cyclical in the near term, but over long periods of time it tends to perform very well.

Over the past 20 years, this Canadian stock has compounded earnings per share by an 11% annual rate! It has grown its annual dividend by a 16% compounded rate in that time. Today, this stock yields around 2%.

Given its great track record, it is not a cheap stock with a price-to-earnings ratio of 20 times. However, if you want a Canadian stock that steadily outperforms inflation, this is a great long-term bet.

An essential services retailer

Another slightly boring business with enduring attributes is Alimentation Couche-Tard (TSX:ATD). It is a leading operator of convenience stores and gas stations around the world.

The company has delivered an impressive track record of long-term returns. Since 2012, investors have earned a 652% return (23% annualized)! If you look at its long-term stock chart, it has been a pretty steady upward trajectory.

A large part of its success comes from its disciplined approach to capital allocation. Whether it be investing in technology or product mix, or acquiring convenience store portfolios, it has a very high threshold for earning elevated returns. This standard is embedded across the company. This gives it a core competitive advantage that should endure for many years ahead.

A top Canadian software stock

If you want to look outside of Canadian blue-chip stocks, Constellation Software (TSX:CSU) is definitely a stock to consider owning for decades. Not including spinouts, the company has delivered a 1,937% total return (35% annualized) over the past 10 years.

The company has been incredibly successful investing in hundreds of small, niche software businesses across the world. Despites its $40 billion market cap, the company has defied the odds and continued to invest at very high rates of return.

Recently, Constellation has spun-out a software consolidation business in Europe. Likewise, in the coming weeks, it is spinning out a niche listed business focused on media and telecommunications technologies. As it gets larger, it appears that this may be a further strategy to help enhance longer-term shareholder value.

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 Constellation Software. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Canadian National Railway, Constellation Software, and Fortis. The Motley Fool has a disclosure policy.

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