Although investing requires tonnes of research and is not so straightforward with the price of stocks based on many different factors, it also doesn’t have to be that complicated either. After all, the goal of all investors should be to find the best Canadian stocks that you can buy and hold forever.
Investors often make the mistake of selling off their winners too quickly, hoping to lock in their gains. In reality, though, it’s not easy to find stocks that are the best of the best. So, when you do, your target should be to hold these stocks as long as possible to take advantage of their lengthy growth potential.
Not only is it significantly more difficult to find new stocks every six months or every year, but when you buy and hold stocks for the long haul, you can take advantage of the power of compound interest.
That’s how a stock like Dollarama, which averages about a 20% return a year, has earned a total return of more than 600% for investors who have owned it for the last decade.
So, with that in mind, if you’re looking for some of the best Canadian stocks to buy now and hold forever, here are three of my top portfolio picks.
One of the best defensive growth stocks that Canadian investors can plan to hold forever
There are a handful of high-quality defensive growth stocks in Canada to buy now and hold for years. But while there are a few to choose from, one of the very best that also happens to be trading at a discount today is Brookfield Infrastructure Partners (TSX:BIP.UN).
As you’ll see, each of my picks is a large-cap, blue-chip stock with highly defensive operations. That doesn’t mean every company worth buying and holding for decades is a large-cap, blue-chip stock. However, many of them will be.
These companies, with their essential and defensive operations, make for ideal core portfolio stocks. They offer defence and resiliency but can also power your portfolio’s growth with their consistently increasing dividends each year.
In Brookfield Infrastructure’s case, its portfolio of highly essential infrastructure assets, spread all across the globe, makes it extremely defensive. Plus, it’s constantly looking to recycle its capital, selling off more mature assets and investing in new opportunities, which is what leads to such impressive and consistent growth.
Therefore, considering that Brookfield trades just off its 52-week low, offers a yield of more than 5.4%, and aims to increase that distribution by 5% to 9% each year, it’s one of the best Canadian stocks you can buy and one I plan to hold forever.
Two dominant large-cap stocks that are ideal long-term investments
In addition to Brookfield Infrastructure, two more of the very best Canadian stocks I plan to hold forever are Enbridge (TSX:ENB), the massive energy infrastructure stock, and Nutrien (TSX:NTR), the largest producer in the world of potash and third largest of nitrogen, two key chemical ingredients in making fertilizer.
Both of these stocks are ideal because they have lengthy track records, massive operations and businesses that dominate their respective industries, and the fact that the industries they serve are so essential.
In Enbridge’s case, energy is one of the most important, if not the most important, sectors of our economy. Enbridge’s operations are essential to the energy industry, transporting roughly 30% of the crude oil produced in North America and roughly 20% of the gas consumed in the United States, just to name a few of its operations.
Furthermore, it’s consistently growing its operations and increasing its distributable cash flow, which is what’s allowed Enbridge to increase its dividend every year for over a quarter century now. That dividend has a yield of more than 8% at Enbridge’s current trading price.
With Nutrien, not only is it one of the pre-eminent global suppliers of crop nutrients, but it also has its own retail network of more than 2,000 stores around the world, which improves its operations significantly through vertical integration.
And since Nutrien’s operations are helping to safely and sustainably feed a growing world, it’s a highly defensive stock, too, that’s also constantly increasing its dividend.
So, if you’re looking for the best Canadian stocks to buy and hold forever, Both Enbridge and Nutrien are certainly top choices.