One of the most rewarding aspects of investing is identifying one or more stocks you can keep forever in your portfolio. Fortunately, there’s no shortage of TSX stocks you can hold for the long run.
Here’s a look at three great TSX stocks you can keep forever without worrying.
Option 1 – The utility you can buy and forget
Few stocks provide the defensive appeal of a utility. And when it comes to utility stocks, Fortis (TSX:FTS) is the utility stock that should be on the radar of all investors.
But why invest in a boring utility?
Utilities are often stereotyped as boring investments that lack growth. In reality, utilities generate a stable, recurring, and reliable revenue stream. That revenue stream is also backed up by long-term regulatory contracts that can span decades.
The reliability of that revenue stream also means that Fortis can invest in growth and pay out a handsome dividend. In the case of Fortis, that dividend works out to a juicy 4.13% yield.
And if that’s not enough, Fortis has provided a generous uptick to that dividend for a whopping 49 consecutive years. In short, this makes Fortis a great TSX stock you can buy now and hold forever.
Oh, and speaking about forever, there’s never been a better time to buy Fortis. As of the time of writing, Fortis is trading down about 5% over the trailing 12-month period.
Option 2 – The bank your portfolio really needs
It would be impossible to compile a list of great TSX stocks you can keep forever in your portfolio without mentioning at least one of Canada’s big banks.
And that bank for investors to consider right now is Canadian Imperial Bank of Commerce (TSX:CM).
But why should you buy bank stocks right now? Let’s try to answer that question with a few key points.
Canada’s big banks are well-known for faring better than their U.S.-based peers during financial slowdowns. In fact, the period following a slowdown is typically a time when the big banks have seen stellar growth.
In the case of CIBC, the bank is trading down a whopping 23% over the trailing 12-month period. But is that drop really warranted? Part of that decline can be attributed to CIBC’s larger mortgage book compared to its peers, and the risk that represents in an environment of rising rates.
Again, prospective investors need to stay focused on the longer-term opportunity here, and not the shorter-term volatility.
In addition to the current discount on CIBC’s stock price, prospective investors should also note that the bank underwent a split last year. While the event didn’t create value, it did lower the cost of entry for investors.
Finally, let’s talk dividends. CIBC offers investors an appetizing quarterly dividend that boasts annual bumps and a juicy 5.41% yield.
In short, CIBC is one of the best TSX stocks you can keep forever in your portfolio.
Option 3 – The Telecom that will pay dividends
Canada’s telecoms represent another option for long-term investors looking for a stable source of growth and income.
BCE (TSX:BCE) is the telecom that investors should be looking to as one of the best TSX stocks you can keep forever right now.
BCE is one of the largest telecom stocks in Canada, boasting an immense network that blankets the country in coverage. Apart from its core subscription-based services, BCE also operates a massive media segment that provides another complementary source of revenue.
Telecoms have always been perceived as defensive stocks, but what few investors may realize is just how much more defensive those stocks have become in recent years. The pandemic pushed students and workers into remote and hybrid arrangements that have now become permanent for many.
In other words, the need for a fast and reliable internet connection has become one of necessity. Throw in the ongoing demand for 5G devices (and their ever-increasing data needs) and you have some serious long-term growth.
Finally, let’s talk about BCE’s dividend. The company has been paying out dividends for over a century without fail. Today that payout works out to an insane 6.41%, making it one of the better-paying dividends on the market, and a must-have for any well-diversified portfolio.