One reason why a Tax-Free Savings Account nest egg looks more attractive to many Canadian investors compared to a Registered Retirement Savings Plan nest egg is that it’s accessible at any given time, not just at retirement. It’s easy enough to develop a decently sized nest egg in your TFSA, even if you are looking for a hands-off investment approach.
The right buy-and-forget stocks that grow for years, preferably decades, can help you get your portfolio to a good enough size. There are three large-cap stocks that encapsulate multiple characteristics of good buy-and-forget stocks.
A railway stock
Thanks to a powerful acquisition, Canadian Pacific Kansas City (TSX:CP) has now become the first railway company to directly serve three North American countries: Canada, the U.S., and Mexico. This gives it a strong competitive edge in an already consolidated industry.
As a stock, it rewards its investors via dividends and decent capital appreciation. It is a well-established Dividend Aristocrat, and even though the yield is usually quite paltry, the stock more than makes up for it with its growth potential. The stock rose by about 320% in the last decade.
Even though it has already been a strong and rewarding stock, the chances of it riding its advantage to new heights are quite strong, making it a powerful pick for the near future.
An asset management company
As one of Canada’s largest asset management companies with over a hundred years of history behind its operations, Brookfield (TSX:BN) is more than just a trusted name in the Canadian stock market.
It has an impressive global reach and invests in assets that are likely to remain relevant for decades to come, including infrastructure and renewables. Both the geographic and asset diversity give it a strong edge.
Though its capital appreciation has not been on par with Canadian Pacific, the combination of dividends and growth is relatively similar. It offers a minimal yield (0.89% right now), and in the last decade, the stock rose by about 150%. But its global reach, business model, and successful history make it a good buy-and-forget stock.
A consumer staples company
If you are looking for an even healthier combination of a resilient business model and decent long-term growth potential, Metro (TSX:MRU) is an amazing option. It has two evergreen businesses: food and medicine. The company has multiple brands under each business segment and, collectively, about 975 stores under the food category and 645 under the pharmacy business segment.
The stock has risen by about 240% in the last 10 years, and the overall returns (including dividends) have been close to 290%. It offers a moderately healthier yield compared to the other two and is also a Dividend Aristocrat. Its business model and strong regional presence make it a compelling buy-and-forget pick.
The three blue-chip stocks can help you grow your nest egg to a decent size, assuming they keep growing at the pace they have been or improve upon its past performance. The business models are strong, and the financials of the three companies are relatively healthy, endorsing their position as decent long-term holdings.