Canadian investors have not had a whole lot to cheer about in 2023. There have been several promising runs from the broader stock market but any gains earned over the past 12 months have been short-lived. Today, the S&P/TSX Composite Index is trading at just about the same price as it was at the beginning of the year.
It’s years like this one that reminds investors why it pays to have a long-term time horizon. Those looking to turn a quick profit in the stock market over the next few months will have their work cut out for them. But for anyone with an investing time horizon of decades or longer still in front of them, it’s as good a year as any to be putting cash to work in the stock market.
I’ve reviewed three Canadian stocks that are the types of companies you can feel good about buying, regardless of how the broader market is performing. Through thick and thin, these are three TSX stocks you can count on for the long term.
Royal Bank of Canada
If you’re looking for long-term dependability, the major Canadian banks are hard to beat. As not only the largest bank but the largest stock on the TSX, Royal Bank of Canada (TSX:RY) is a perfect place to start.
The $165 billion bank has customers spread across the globe, offering a range of different financial services to choose from. From banking to insurance, there’s not much in the financial realm that RBC cannot help its global customers with.
There are more exciting stocks on the TSX to choose from; there is no argument there. But if you’re looking for a steady stream of passive income and low levels of volatility, this 4.5%-dividend-yielding bank is tough to beat.
Constellation Software
Investors in search of market-beating growth may be more interested in this tech stock. Constellation Software (TSX:CSU) commands a steep price, but it’s certainly warranted, based on recent performance. In terms of growth returns, not many TSX stocks have outperformed Constellation Software over the past two decades.
Shares are up 170% over the past five years, crushing the broader market’s return of less than 30%. In addition, Constellation Software is up more than 20% year to date and trading just below all-time highs.
It may not be cheap, but there aren’t many Canadian stocks that can compete with this one when it comes to dependable returns.
Northland Power
The last pick on my list is a beaten-down renewable energy stock. In Northland Power’s (TSX:NPI) defence, there aren’t many renewable energy stocks trading near all-time highs today. It’s been a loss-filled past couple of years for the sector.
Northland Power is down 30% year to date and 50% below all-time highs. Excluding the dividend, which is currently yielding above 4%, the energy stock has found itself underperforming the market’s return over the past five years.
There’s no denying the long-term growth potential of the green energy space. Demand has continued to rise in recent years, and I wouldn’t bank on that growth slowing down anytime soon.
If you’re willing to be patient, now could be an incredibly opportunistic time to load up on a renewable energy stock.
