Buy and Hold Canada’s Most Stable, Long-Term Stocks

Two stocks with more than 100 years of dividend payment records are among Canada’s most stable long-term stocks.

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Dividend investing is one way to make free or idle cash work for you. The investment transforms into regular income streams. If you stay in the market for the long haul, Toronto-Dominion Bank (TSX:TD) and Imperial Oil (TSX:IMO) are among Canada’s most stable long-term stocks.

The common denominator between the big bank and the petroleum company is dividend payment history. Besides being the second-largest financial institution, TD has been paying dividends without interruption since 1857 or 166 years. Similarly, Imperial Oil has paid dividends every year for over 100 years, not to mention 28 consecutive years of annual dividend increases.   

While TD’s (4.99%) and Imperial Oil’s (2.47%) dividend yields aren’t the highest in the market, you won’t lose sleep worrying about the spikes and dips of the stock prices. Both are established dividend payers, so quarterly payouts continue, regardless of the economic environment.

Financial stability

TD didn’t present spectacular results in third-quarter (Q3) fiscal 2023, but the results showed financial strength and stability. In the quarter that ended July 31, 2023, revenue grew 16.9% to $12.77 billion versus Q3 fiscal 2022. Net income declined 11.5% year over year to $2.96 billion, while provision for credit losses increased 118% to $766 million.   

“TD delivered strong revenue growth in the quarter and demonstrated the value of its diversified business mix in a challenging economic environment,” said Bharat Masrani, Group president and chief executive officer (CEO) of TD Bank Group. “Investments across our business further strengthened the Bank’s ability to deliver legendary experiences to more than 27 million customers.”

The $139.93 billion banking giant expects to advance its Wholesale Banking segment long-term growth in the U.S. following the acquisition of full-service investment bank Cowen Inc. on March 2023. However, TD terminated the merger with First Horizon Corporation in the U.S., due to difficulty obtaining regulatory approval.

On October 19, 2023, the TD Bank Group was named the Best Consumer Digital Bank in North America for the third consecutive year by Global Finance in their World’s Best Digital Banks Awards 2023. But apart from the accolades, TD has endured countless economic downturns and deep recessions. The bank stands tall after every crisis with steady dividend payouts.

Market-beating returns

Oil & gas stocks have recovered from a sluggish start in 2023, and energy is now the second-best performing sector (+10.32%). At $80.85 per share, IMO’s market-beating return is 25.20% versus the broader market’s -2.25% year-to-date loss.

The $47.22 billion is Canada’s second-largest integrated oil company, and its majority owner is American oil giant American oil giant ExxonMobil. In Q2 2023, revenue and net income declined 31.7% and 71.9% year over year to $11.8 billion and $675 million.

Imperial Oil’s chairman, president, and CEO, Brad Corson, said the significant drop in earnings was due to planned maintenance activities in the Upstream and Downstream segments. However, he expects stronger volumes in the second half of 2023, as the commodity price environment strengthens.

Buy and hold

Financial and energy are the heavyweight sectors in the TSX. The combination of Imperial Oil and TD in a stock portfolio forms a formidable duo. Expect the quarterly dividend payments to continue and last for decades.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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