Consistent performance, reliable dividends, timeless business models, and adapting to changing market conditions are just some of the traits of the stocks you can hold forever.
Not all “forever” stocks may have all these traits, but there are plenty of blue-chip stocks with the right set of strengths that allow investors to hold them for years, even decades.
Fortis (TSX:FTS) is arguably one of the safest and most revered dividend stocks in Canada and has been for decades, and there are multiple reasons for that, starting with its business — utilities. The company caters to the needs of 3.4 million electric and gas utility customers spread out across multiple markets in Canada, the U.S., and Caribbean countries. That’s both geographic and operational diversity.
Then there is the financial stability. It has a reliable revenue source — i.e., utility bills, and even though the company carries a significant amount of debt, it has been managed quite efficiently. But the reason most investors lean towards this utility company is its stellar dividend history.
The company has grown its payouts for 49 consecutive years, making it the second-oldest Aristocrat in Canada and the next Dividend King of the country.
While dividends are its primary attraction, the capital-appreciation potential is quite decent as well, pushing the overall return potential to a more desirable level.
Canadian bank stocks like the Toronto-Dominion (TSX:TD) are cherished for their dividends. The payouts are generous, consistently growing, and are financially safe. But TD offers decent growth along with the dividends as well, though the performance of the stock has been quite lacklustre in the past five years, especially if you disregard the sector-wide bullish phase.
Still, your chances of making a decent return with this stock through both its dividends and capital appreciation potential may be quite decent if you are planning on holding it for a long time. It has an impressive presence in the U.S. as well, which may allow it to grow more rapidly compared to locally oriented banks.
Dollarama (TSX:DOL) is one of the largest retail chains in Canada, with over 1,500 stores in all provinces, and the number is expected to grow to 2,000 by 2031. It markets itself as the only pure-play dollar store chain in the country, though it is expanding its reach in a few other countries as well (under a different banner).
The stock’s growth has mimicked its exceptional organic growth, and in the last decade, the company returned about 569% to its investors. Its business model, national footprint, and the market segment it operates in (affordable goods) make it an ideal long-term pick. It pays dividends, but the yield is too low to be a consideration factor.
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If you have $3,000 to invest and you wish to pick stocks that you do not have to check back on for years, even decades, Dollarama, TD Bank, and Fortis can be ideal picks. You can use the dividend-reinvestment plans for each of these statements to increase your stake in the three companies beyond what the routine growth allows for.