Often one of the biggest mistakes that Canadian retail investors make when looking to buy stocks for their portfolio is that they look to invest in stocks that are already hot and full of hype rather than buying the best companies on the market.
The problem with this strategy is that when you buy stocks that have already become hot and are in the midst of a rally, you’ll often miss the opportunity and buy too late.
In addition, sometimes stocks will perform strongly for a few years or quarters but don’t have the competitive advantages to sustain their dominance for decades.
That’s why it’s far better to buy stocks that you can hold for the long haul – forever is ideal. For example, one of Warren Buffett’s most famous quotes is, “Our favourite holding period is forever.”
Ideally, you want to try and focus on finding stocks that can consistently provide above-average returns, for years to come.
So if you have cash today and are looking to buy the best Canadian stocks for your portfolio, here are three companies I own that I plan to hold forever.
One of the best and most impressive stocks in Canada
If you’re a Canadian investor looking for some of the best stocks in the country to buy and hold for years, Brookfield (TSX: BN) has to be one of the first stocks you consider.
Brookfield is a parent entity that has spun off several sector-specific public companies. In fact, Brookfield currently has about $135 billion invested across its asset management, insurance, and operational business sectors.
One thing to note, though, is that because the company owns tonnes of assets, it relies on debt to boost its returns, which has led to a falling stock price over the last year as interest rates continue to rise.
However, at the same time, Brookfield is also known for its prudent debt management and strategic acquisitions during recessions, which historically has allowed it to thrive post-downturn.
Furthermore, although Brookfield pays a dividend with just a 0.8% yield, the Canadian stock typically reinvests its profits to expand its business, one of the reasons why it’s one of the best stocks in Canada.
Therefore, while it trades so cheaply, it presents an attractive option for long-term value investors and is easily one of the best Canadian stocks you can buy now.
One of the best blue-chip stocks on the TSX
Another top Canadian stock to consider buying today and holding for years or even decades to come is Nutrien (TSX: NTR).
Nutiren is a vertically integrated agricultural firm that produces key ingredients for fertilizer, in addition to having processing operations as well as a massive network of retail stores.
The stock experienced a massive surge in early 2022. However, in 2023 Nutiren has seen its share price fall to just over $85 today from its high of $141 last year.
The main reason for the fall in stock price is that fertilizer prices have been declining. These impacts on its operations, though, should only be temporary. And for the time being, they’re causing Nutrien to trade cheaply and offering an excellent opportunity for Canadian investors to buy one of the best stocks in the country.
One of the most impressive growth stocks in Canada.
In addition to Nutrien and Brookfield, goeasy (TSX: GSY) is another high-quality stock to buy that’s been growing its operations as well as its share price rapidly over the last few years.
In fact, in just the last five years, its revenue has increased from just over $400 million to more than $1 billion, leading to a significant increase in the stock price and a total return for investors of roughly 200% over that stretch.
For years, goeasy has shown its ability to rapidly expand its loan book and grow its business while managing to keep its charge-off rate within its target range, leading to a rapid increase in profitability.
In fact, from 2017 through 2022, goeasy’s normalized earnings per share (EPS) increased from $2.97 to $11.55. And this year, analysts expect its EPS will grow another 17% to 13.53.
So while the impressive growth stock trades cheaply, at a forward price-to-earnings ratio of just 8.9 times, it’s easily one of the best Canadian stocks you can buy now.
