Just when it seemed that the interest rate hikes had ended, the Bank of Canada (BoC) announced its plans to raise rates by 25 basis points on July 12, 2023. Hopefully, this will be the last of the interest rate hikes to control inflation. For someone planning their retirement, higher interest rates and inflation can be a major pain.
Due to slower economic activity, the returns on their investments can diminish. In harsh economic environments, allocating money to investments in the stock market might not seem like a safe bet. Macroeconomic challenges make it difficult for growth stocks to perform well. Fortunately, the Canadian stock market offers plenty of relatively lower-risk investments you can consider for a retirement portfolio.
Today, I will discuss two safe long-term growth stocks you can consider adding to your self-directed portfolio.
Canadian Pacific Kansas City
Canadian Pacific Kansas City Ltd. (TSX:CP) has long been a strong player in the Canadian railway sector. A result of a successful merger between Canadian Pacific Railway and Kansas City Southern, CPKC stock has put itself in an even stronger position in the industry. The $98 billion market capitalization company owns and operates the only railway network connecting Canada, the US, and Mexico.
The additional network after the merger will allow the industry-leading railroad company to achieve stellar long-term growth. Between 2024 and 2028, the company is targeting a high-single-digit revenue compounded annual growth rate (CAGR).
With plans to convert most of its core adjusted income to free cash flow in this period, the transnational railway has strong growth prospects. As of this writing, CPKC stock trades for $105.25 per share, boasting a 0.72% dividend yield.
WSP Global
WSP Global Inc. (TSX:WSP) is a $21.4 billion market capitalization company providing engineering and design services to clients across various sectors of the economy. From Property and Buildings to Industry, Transportation & Infrastructure, Power and Energy, and more, it has a diversified revenue base. QSP Global also offers strategic advisory services, servicing clients across several international markets.
WSP Global has a long history of delivering successful engineering and design solutions to its clients since 1885. With a massive international reach and successful track record spanning over a century, WSP Global is a company that can continue standing the test of time for decades to come. As of this writing, WSP Global stock trades for $171.99 per share and boasts a 0.87% dividend yield.
Foolish takeaway
Investing in blue-chip stocks that can weather harsh economic environments and deliver steady long-term wealth growth through capital gains can be a great part of your retirement plan. Canadian Pacific Kansas City stock and WSP Global stock are two blue-chip stocks that have delivered terrific total returns to investors over the decades.
Among the two, I would invest in Canadian Pacific Kansas City stock for its substantial long-term growth potential after completing a successful merger. Boasting the only railway service connecting Canada, the US, and Mexico, this industry-leading railroad company can be a strong buy-and-hold investment for a retirement portfolio.
