Investors are often looking for the newest and hottest stocks to buy for their portfolio that the market may not yet know about. And while this can be a good strategy for finding up-and-coming companies with significant growth potential, it’s essential to balance these investments with stable and reliable businesses such as top Canadian large-cap stocks.
Because these blue-chip, large-cap stocks are well known to every investor, it often seems like in order to find the next big thing, you have to look for undiscovered businesses.
True, Canadian large-cap stocks will often have less growth potential than a smaller stock with a longer runway of growth. Nonetheless, there are also many advantages to owning large-cap stocks as well.
These companies can be much more reliable due to their massive and well-diversified businesses. Furthermore, because they are well-established, they often pay significant dividends and increase those payments often.
Plus, in addition to their reliability, they may already have a dominant position in their industry. This competitive advantage helps make them stable and core stocks in your portfolio that you can buy and hold for years.
Therefore, since it’s essential to have a well-diversified portfolio and balance higher-risk stocks with more robust companies, here are two top Canadian large-cap stocks that you can buy now and hold for years to come.
This Canadian large cap is one of the top dividend stocks on the TSX
Canadian investors can choose from several high-quality large-cap stocks to buy now and hold for years, but Enbridge (TSX:ENB), the massive energy infrastructure stock, is easily one of the best.
Enbridge is one of the top Canadian large-cap stocks to buy and hold long-term because its operations are essential for the North American economy. The stock has many different segments, which give it very broad diversification, plus it’s extremely defensive.
This has helped it to constantly weather the storm when the economy struggles and is also what’s allowed it to raise its dividend every single year for over a quarter century. For example, right now, Enbridge stock offers investors a dividend yield of roughly 7%, and in the last five years, that dividend has been increased by over 32%.
Plus, many of the assets it owns are what’s known as ‘long-life assets,’ meaning they require little maintenance and earn Enbridge tons of cash flow. The company returns this cash to investors as well as continues to invest in growing its operations.
Therefore, although Enbridge is a highly popular holding among Canadian investors, there’s a reason why it’s such a common stock to buy. So if you’re looking for a high-quality company that you can buy and stash in your portfolio for years, a top Canadian large-cap like Enbridge is one of the best to consider.
A top TSX telecom stock
In addition to Enbridge, another high-quality Canadian large-cap stock you won’t want to overlook is BCE (TSX:BCE), the massive telecommunications stock.
BCE is a stock that has many similarities to Enbridge, despite being in completely different sectors. BCE’s market cap is smaller at $58 billion compared to Enbridge’s, which is north of $100 billion. Though the energy infrastructure company also has a dominant position in its industry, making it one of the best Canadian large-cap stocks to consider adding to your portfolio.
The most significant similarity, though, is that BCE also has highly defensive operations, as communications is an essential industry. Furthermore, it too owns long-life assets such as telecommunications infrastructure all over the country.
This allows BCE to be a cash cow much like Enbridge, which is why it also has a long track record of annual dividend increases and offers an attractive yield of more than 6% today.
Therefore, it’s the perfect company to buy and hold as a core portfolio stock. It offers long-term growth potential but also provides stability in the short term, especially in an environment such as today’s.
So if you’re looking to shore up your portfolio and increase the passive income your portfolio generates, buying a high-quality Canadian large-cap like BCE stock is an ideal investment.
