3 Reliable Growth Stocks for Slow and Steady Wealth

Canadian investors, here are three growth stocks you can buy and hold for decades for slow and steady wealth growth.

| More on:

Investing in growth stocks is a strategy that might have taken a back seat for many Canadian investors. Recent years of stock market investing have been uncertain due to an onslaught of macroeconomic factors and recession jitters.

However, growth investing does not necessarily mean taking unnecessary risks in volatile stocks with a chance of securing short-term, outsized capital gains. It can also entail a patient, long-term strategy to secure wealth growth through slow and steady gains. Using stock market investing as a tool for long-term wealth generation can help you set yourself up for more financial freedom down the line.

Today, we will look at three TSX stocks you can consider for this purpose.

Canadian Pacific Kansas City

Canadian Pacific Kansas City (TSX:CP) is a giant in the North American railroad space, especially after the merger with Kansas City Southern on April 14, 2023. The $97.81 billion market capitalization stock has become a top contender for solid growth due to the development. The move puts it in a more competitive position in a largely consolidated industry with high barriers to entry.

While the company has a substantial debt it must manage in the next few years, the new product lines and synergies will undoubtedly help CP stock continue growing shareholder value. Analysts expect CP stock to achieve double-digit earnings per share (EPS) growth in 2024. As of this writing, it trades for $104.84 per share and pays its investors at a 0.72% dividend yield.

Royal Bank of Canada

Royal Bank of Canada (TSX:RY) is the largest among the Big Six Canadian banks and the biggest stock trading on the TSX in market capitalization. The $187.92 billion market cap stock serves over 17 million clients worldwide and is a stock worth considering as a long-term holding for several more reasons.

As of this writing, it trades for $134 per share, paying its investors at a juicy 4.11% dividend yield. It trades at 11.73 price-to-earnings and 1.69 times price-to-book ratios, suggesting that, while not cheap, it is trading at a fair price.

With a century and a half-long track record of financial stability, solid dividend-paying streak, modest growth, and high profit margins, it can be an excellent long-term holding for your self-directed portfolio.

Hydro One

Hydro One (TSX:H) is unlike the other two stocks, given that it has only been around for almost a decade. However, the $23.81 billion market cap renewable energy company has all the makings of a long-term growth stock.

Utility stocks are typically “boring” because bull markets do not necessarily inject outsized short-term capital gains. Hydro One stock negates the general trend in only a few years of trading on the stock market.

The clean energy industry is slated to grow substantially in the coming decades. Hydro One is among the leading providers of hydroelectric power, effectively growing shareholder value more rapidly than most of its utility industry peers.

As of this writing, it trades for $39.70 per share, paying its investors at a 2.99% dividend yield and up by 82.53% since it began trading on the TSX.

  • We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Hydro One Ltd. made the list!

Foolish takeaway

These three TSX stocks are among the safest investments you can buy and hold for the long run. Allocating adequate contribution room in your Tax-Free Savings Account can let you accumulate capital gains and dividend income without incurring income or capital gains taxes.

So, if you hold these stocks in your portfolio for two to three decades, they can help you with predictable wealth building.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Pacific Kansas City. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Muscles Drawn On Black board
Dividend Stocks

TFSA: 2 Dividend Stocks That Could Rally in 2025

These two TSX dividend stocks can be excellent holdings for your TFSA leading into another year of stock market investing.

Read more »

gift is bigger than the other
Dividend Stocks

3 Canadian Dividend Stocks to Double Up on Today

Looking for some dividend payers with a large future ahead? These three are certainly the ones to consider first and…

Read more »

man touches brain to show a good idea
Dividend Stocks

The Smartest Dividend Stocks to Buy With $1,000 Right Now

These dividend stocks focus on paying and increasing their distributions over time, making them the smartest stocks to earn passive…

Read more »

money goes up and down in balance
Dividend Stocks

Is Open Text Stock a Buy for its 3% Dividend Yield?

Down almost 10% in the last five years and yielding 3%, Open Text stock is worth considering for its capital…

Read more »

jar with coins and plant
Dividend Stocks

3 Reasons to Buy Brookfield Infrastructure Partners Stock Like There’s No Tomorrow

Brookfield Infrastructure is a high dividend TSX stock that trades at a discount to consensus price target estimates.

Read more »

ways to boost income
Dividend Stocks

Retirees: 2 Canadian High-Yield Stocks to Buy Now for Passive Income

These stocks still look cheap and offer attractive yields.

Read more »

hot air balloon in a blue sky
Dividend Stocks

TSX Flying High: 2 Stocks to Buy for Capital Gains

When it comes to bullish stocks, it's essential to make relatively quick decisions to capture most of a bullish trend.…

Read more »

Piggy bank in autumn leaves
Dividend Stocks

CPP Pensioners: You’re Getting an Inflation Increase in 2025

CPP benefits increase with inflation, but this stock's dividends can outpace even that.

Read more »