Just as Rome wasn’t built in a day, growing a retirement nest egg takes a lot of time, intelligent investment decisions, and patience. Stock market investing can be a great way to enjoy considerable long-term wealth growth. How you approach using it and the results depend on the decisions you make.
You can look for powerful short-term growth stocks. However, timing the entry and exit points effectively can be challenging. While you can always capitalize on upward trends or spikes for a boost every now and then, setting up a solid foundation of long-term growth stocks first might be a better idea.
With reliable long-term buy-and-hold assets in place to offset potential losses from riskier investments, you can balance the portfolio with high-growth stocks.
Today, we will look at three stocks you can add to your portfolio and forget about in your Registered Retirement Savings Plan (RRSP) for tax-deferred growth.
Canadian Pacific-Kansas City
Canadian Pacific-Kansas City (TSX: CP) is a $92.87 billion market capitalization railway formed after the merger between Canadian Pacific Railway and Kansas City Southern earlier this year.
The merger makes it a compelling buy on account of the promising growth prospects the deal unlocked. The company expects to achieve earnings and revenue-growth rates of 6.8% and 12.7% per year, respectively, in the next three years.
Further expansion into the North American economy and boasting the only railway network connecting the U.S., Canada, and Mexico, it is in a pole position to deliver substantial long-term growth.
As of this writing, CP stock trades for $99.74 per share, boasting a 0.76% dividend yield. While macroeconomic factors can impact its short-term profitability, it can be a stock worth adding to a retirement-focused portfolio.
Intact Financial Corporation
Intact Financial (TSX: IFC) is a $35.77 billion market capitalization giant in the insurance industry. A Toronto-based multinational property and casualty (P&C) insurance company, it trades at a premium 14.33 times forward price-to-earnings ratio.
While its expensive valuation might make it look like it does not have a lot of returns to offer, the exact opposite could be true.
With the North American P&C market still largely fragmented, the well-capitalized giant might be able to secure above-average earnings growth. The company’s management is great at identifying value and driving more efficiency.
These are both qualities of firms skilled in mergers and acquisitions. As of this writing, it trades for $200.70 per share and boasts a meagre 2.19% dividend yield. That said, it is a well-established Dividend Aristocrat with a healthy payout ratio history that you can count on in the long run.
Metro
Metro (TSX: MRU) is a $16.57 billion market capitalization giant in the Canadian food retailing industry. Operating primarily in Quebec and Ontario, the Montreal-based company is the third-largest grocer in the country.
Besides over 900 grocery stores in the two provinces, it also has a popular pharmacy network comprising over 640 stores under its belt.
Metro is a stock with immense defensive appeal, and its growing network of grocery and pharmacy stores reflects long-term growth potential. Just the sheer necessity of its wares makes it a stock you can invest in confidently.
The demand for groceries and medicine is not going anywhere, making it a stock to bank on. As of this writing, it trades for $72.37 per share, boasting a 1.67% dividend yield.
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Foolish takeaway
Finding the right strategy to grow your retirement savings is crucial to successful retirement planning. Industry leaders with albeit slow but consistent growth records can be reliable assets to buy and hold for such a portfolio. To this end, CP stock, IFC stock, and MRU stock can be good investments to consider.
