2 Stocks to Keep Buying Over the Next 5 Years

The market uncertainty has created an opportunity to buy resilient stocks and book your place in a recovery rally and long-term growth.

| More on:
analyze data

Image source: Getty Images

The last two years saw unexpected momentum in some sectors, like tech, oil and gas, real estate, and banks. In 2020, oil and real estate stocks crashed while tech stocks flourished. The situation reversed in 2021 and aggravated in 2022, as rising interest rates made mortgages expensive and reduced house prices. Then the U.S. bank crisis pulled down bank stocks in March 2023. Such sector-specific incidents have confused investors investing monthly or quarterly on which stocks to continue buying.

Two TSX stocks to continue buying in a volatile market 

In a bear market, one of the safest stocks to invest in are dividend heavyweights that have withstood the worst crises without dividend cuts. Now is the time to invest in these stocks and lock in a dividend yield of over 6.5%. A 6.5% yield can double your money in over 11 years. It is also a good time to buy resilient growth stocks giving your portfolio a chance to outperform the market. 

TC Energy stock 

TC Energy (TSX:TRP) stock slipped 24% from its June 2022 peak, when oil prices peaked at US$125. It underperformed other oil and gas pipeline stocks that fell 9-15% from the June 2022 peak due to ballooning project costs. Energy infrastructure companies spend significant capital to build infrastructure. This infrastructure generates toll money for allowing oil and gas to flow through its pipelines. 

But building pipelines is not easy. Environmental impact and other factors could lead to costly delays in the project. Pipeline companies cannot transfer the cost of these delays to consumers, as toll rates are regulated. Hence, when TC Energy more than doubled the cost estimate for the Coastal GasLink pipeline project to $14.5 billion, analysts questioned the feasibility of the over-budget project. 

TC Energy reduced the surplus cost ($3 billion) of the project from its operating profit. That is an expense the company has to bear. A $3 billion reduction reduced its profits to below $1 billion, and the stock underperformed. Another year of delay could add $1.2 billion to the cost. 

The good news is the gas pipeline project is 84% complete. There are chances that it could be completed by the end of the year. Once the pipeline is operational, TC Energy could see the cash flows come. 

As for its 3-5% dividend growth, the company can maintain this growth momentum from its other projects that are doing well. The project weakness is the time to keep buying TC Energy stock and lock in over 6.5% dividend yield. You can also benefit from a rally as the Coastal GasLink pipeline helps TC Energy tap North America’s liquefied natural gas exports. 

Descartes Systems 

Descartes Systems (TSX:DSG) helps companies transport goods, services and information from one place to another efficiently. Its supply chain management solutions cater to various verticals from airlines to e-commerce. As long as there is domestic and international trade across states or across the street (last-mile delivery of e-commerce), Descartes will continue to earn revenue. 

The last two years saw a remarkable change in the demand for its services. Its fiscal 2022 (ending January 31, 2022) revenue surged 21.8%, driven by sales of its regulatory solutions from the United Kingdom due to Brexit. Its fiscal 2023 revenue surged 14.4%, driven by sales of its global trade intelligence solutions. While the tech stock selloff pulled the stock price down 35% in the first half of 2022, the supply chain constraints following the Russia-Ukraine war kept demand strong for Descartes. 

It is among the few stock that has recovered 95% to its 2021 tech bubble peak. The recovery shows the resilience of Descartes’s share price and its long-term growth trend. It is a stock you can buy anytime and hold for a long term to get double-digit growth. 

Investing tip 

When market volatility is high, small monthly or quarterly investments in the above two stocks could help you beat the market and get a double-digit return. 

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 Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Descartes Systems Group. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Businessperson's Hand Putting Coin In Piggybank
Dividend Stocks

How Much Can You Really Earn in Passive TFSA Income?

With a diversified portfolio of high yield stocks like Enbridge (TSX:ENB) you could potentially get up to $4,400 per year…

Read more »

data analyze research
Dividend Stocks

2 Stocks to Invest in a Sideways Economy

Not all stocks are equally vulnerable to the weak economy and market, and the right stable investments can help you…

Read more »

Value for money
Dividend Stocks

Why Canadian Investors Should Add This Value Stock to Their Portfolios

This value stock is down now, but this comes all from outside impacts. A year from now, you'll likely wish…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

This 7.1% Dividend Stock Pays Serious Cash

After the pullback, Enbridge stock offers a compelling dividend yield of almost 7.1% It's a good consideration for passive income.

Read more »

stock research, analyze data
Dividend Stocks

3 TSX Stocks With Unbeatable Passive Income and Bargain Prices

Three TSX stocks trading at bargain prices are buying opportunities for their relatively safe and sustainable dividend payments.

Read more »

value for money
Dividend Stocks

3 Cheap Dividend Stocks Paying up to 10%

Income-seeking investors can consider buying shares of high-dividend stocks with monthly payouts, such as Slate Grocery REIT.

Read more »

Senior couple at the lake having a picnic
Dividend Stocks

Retirees: Here’s How to Boost Your CPP Pension

The CPP can only cover a portion of your daily expenses. Take control of your pension, and boost the $811…

Read more »

grow dividends
Dividend Stocks

Boost Your Passive Income With These 3 Cheap Dividend Stocks

Given their high yields and discounted stock prices, these three cheap dividend stocks could be an ideal buy to boost…

Read more »