Some investors mistakenly believe that they have to find the hidden gems, the undiscovered or undervalued dark horses, to make a lot of money in the stock market. That’s rarely the case. In most instances, what investors need to do is to bet on the tried and tested stocks with a proven history of growth and stick to these bets long enough.
So, if you have $30,000 to invest now, there are three simple and trusted stocks you may consider investing $10,000 each in.
A bank stock
Canadian bank stocks are more than just a safe dividend investment, especially if you choose the right candidate, like National Bank of Canada (TSX: NA). The smallest bank among the Canadian Big Six banks has been the most fast-paced grower in the banking industry for the last decade. Like other bank stocks, it also offers financially healthy dividends at an attractive yield (currently 3.9%).
Collectively, the capital-appreciation potential and dividends make the overall returns quite attractive. In the last decade, the total number rose to almost 300%.
Assuming that the stock will maintain these returns going forward, you can recover your entire $30,000 capital investment in 10 years by allocating $10,000 to this bank investment now. You may consider waiting for a more discounted price and higher yield.
A waste management company
One of the characteristics of simple stocks that may offer reliable returns is an evergreen and resilient business model, and Waste Connections (TSX: WCN) fits the bill perfectly. It’s one of the largest waste management companies in the world and has an impressive presence in North America. Its service portfolio is also quite impressive and facilitates a wide range of commercial and residential clients.
The stock’s performance has so far reflected these strengths. It rose by 80% in the last five years alone, and even though it also pays dividends, the yield is quite low. The stock is a bit overvalued right now, but it’s not a strong danger sign for a growth stock like Waste Connections. Solid financials are another endorsement of this being a solid pick.
A precious metal royalties company
Franco-Nevada (TSX: FNV) offers investors a very safe exposure to precious metals — through royalties. The company has developed a comprehensive and globally extensive portfolio of gold royalties over the years.
Since its stake in the company is purely financial, it’s naturally safe from various operational risks associated with mining operations. The different layers of royalties pertaining to different phases of operations add to the company’s safety as an investment.
Franco-Nevada has been a decent growth stock and a consistent dividend payer for a while now. Its returns for the last 10 years were over 400%, so if it continues to grow this way and keeps up its dividend payments, you can reasonably expect a four-fold boost to your $10,000 capital in the company.
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Foolish takeaway
The three blue-chip stocks represent some of the simplest and most rewarding TSX investments. These are essentially buy-and-forget stocks, so they may not require a lot of portfolio management, and the longer you hold them, the more impressive your returns are likely to be.
