When investors look to buy value stocks, the strategy is to find stocks that are undervalued in hopes that they can recover in value and earn you a hefty return.
However, when you look to buy high-quality stocks that are trading undervalued, not only can they earn you an attractive return when they recover in value, but they can also continue to grow for years to come, making them some of the best stocks to buy and hold for years.
In today’s environment, there’s no shortage of these opportunities. Of course, the stocks that you buy and make sense for your portfolio will be different than those of others because everyone has a different portfolio makeup, as well as different long-term goals and risk tolerances.
So with that in mind, if you’re looking to buy stocks now that you can hold for at least five years, here are three of the best to consider.
A top utility stock to buy now to shore up your portfolio
If you’re an investor concerned about the uncertain market and economic environment today and want to shore up your portfolio, one of the top stocks to buy now is Fortis (TSX:FTS).
Buying safe stocks in this environment can make a lot of sense. However, you need to ensure whatever stock you look at buying is a company you can hold for years.
Often safe and defensive stocks can increase in value when the market is selling off, which can impact their ability to earn you a positive return, especially if you buy them overpriced and look to sell them as soon as the market recovers.
The good news with Fortis, though, is that while it is an attractive defence play and one of the most reliable stocks on the TSX, it’s also constantly growing its operations and increasing its dividend.
Fortis is ideal due to the low-risk nature of utility businesses and the fact that its portfolio of utility companies is well-diversified. Plus, the stock has increased its dividend every year for almost half a century, showing why it together with its 3.9% dividend yield is one of the best stocks to buy now and keep long .
A high-quality REIT to buy while it’s undervalued
Although buying a safe and resilient stock like Fortis can make a lot of sense, many investors want to take advantage of the current environment and buy high-quality growth stocks that have years of potential while they trade at a discount.
That’s why one of the top stocks to buy now and hold for years is Canadian Apartment Properties REIT (TSX:CAR.UN), the largest residential REIT in Canada.
CAPREIT offers investors many benefits. Residential real estate is highly defensive, plus the company is constantly looking for ways to grow the value of its business for investors.
And on top of this safety and capital gains potential that it offers, CAPREIT is another stock like Fortis that offers consistently growing passive income.
Over the last five years, its sales have increased by 58%, while its funds from operations (FFO) have grown by 62%. Therefore, while CAPREIT trades at a forward price to FFO of 19.3 times, below its five-year average of 22 times, it’s one of the best stocks to add to your portfolio.
One of the best growth stocks on the market
In addition to CAPREIT, another high-quality Canadian stock you’ll want to buy undervalued in this environment, and a stock that you can hold for years to come as it has massive growth potential, is WELL Health Technologies (TSX:WELL).
However, while the stock is certainly undervalued, it has already rallied by more than 65% year to date, so it’s a stock you’ll want to buy soon.
WELL is an exceptional healthcare tech stock that also is the largest owner-operator of medical outpatient clinics in Canada. It has years of growth potential, and although it’s primarily a growth stock because healthcare is essential, it also has defensive qualities.
Even after its rally over the last three months, though, WELL still trades at a forward price-to-sales ratio of just 1.7 times. That’s cheap for a stock of WELL’s quality but also considerably lower than its three-year average of 5.4 times, making it one of the best Canadian stocks to buy now and hold for years.