3 of the Best Canadian Stocks I Plan to Hold Forever

I plan on holding Toronto-Dominion Bank (TSX:TD) stock forever.

| More on:
Dollar symbol and Canadian flag on keyboard

Image source: Getty Images

If you invest in Canadian stocks, you’d be well advised to plan to hold forever. That’s not to say that you should never sell stocks — to the contrary, you should sell them fairly regularly. However, you should always start off owning a stock with the assumption that you’ll hold it forever. That mindset will tune your mindset to that of a long-term shareholder. With individual stocks, you may eventually want to sell when clear overvaluation emerges — though you shouldn’t plan on selling from the outset. In this article, I will explore three Canadian stocks that I would be comfortable holding forever–two of which I do, in fact, own with long holding periods in mind.

TD Bank

Toronto-Dominion Bank (TSX:TD) is a Canadian bank stock that I have held for about five years. I sold a large percentage of my TD shares last year when I heard the company was under investigation for facilitating money laundering. I later bought them back when the price went below $78.

TD Bank is a very profitable company and is growing fairly rapidly for a bank. It has a 22% net margin, which means that it transforms $22 of every $100 in revenue it earns into profit. It also has a 9.61% return on equity, which means that earnings are fairly high as a percentage of investor wealth.

Although I sold a portion of my TD shares last year, it was not my intention to exit the position completely. I thought that the money laundering concerns merited a smaller weighting, as such concerns led to billions of dollars of fines at Wells Fargo. Later, though, the stock got much cheaper than it had been previously, and news surfaced that TD was only looking at something like US$8 million in fines due to the money laundering investigation. So, I started buying the stock back cheaper.


Brookfield Corp. (TSX:BN) is a Canadian stock that I started buying just last year. It’s a diversified financial holding company. It owns many valuable assets, including the following:

  • 75% of Canada’s largest alternative asset manager
  • A wholly owned insurance company that is growing earnings at more than 100% year over year
  • Large stakes in several Brookfield partnerships

Brookfield stock is currently cheap, going by net asset value (NAV), which is the difference between all the assets in the Brookfield partnerships and their debts. The net value of Brookfield’s partnership stakes exceeds Brookfield’s market cap, which is the value of all of Brookfield’s shares. So, Brookfield appears to be a good value play.

CN Railway

Canadian National Railway TSX:CNR) is a railroad stock that I owned in the past and did, in fact, sell. It might seem strange to mention a stock that I sold in an article about stocks I plan on holding forever, but I didn’t sell CNR because I stopped thinking of it as a good investment. Instead, I sold the shares to make an investment in Berkshire Hathaway stock, which worked out well. Had funds not been limited, I’d have kept CNR.

What does CN Railway have going for it? First of all, it’s a pillar of the North American economy, transporting $250 billion worth of goods each year. Second, it’s extremely profitable, with a 33% net margin. Finally, it has only one competitor in Canada and only a small handful in the United States. On the whole, it’s a great value.

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.

Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Fool contributor Andrew Button has positions in Toronto-Dominion Bank, Brookfield and Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway, Brookfield, Brookfield Corporation, and Canadian National Railway. The Motley Fool has a disclosure policy.

More on Dividend Stocks

protect, safe, trust
Dividend Stocks

How to Earn Safe Dividends With Just $10,000

Earn reliable income with relatively safe stocks like Fortis.

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

2 Dividend Stocks to Beat Inflation

These two TSX dividend stocks can be excellent holdings to beat inflation, even as inflation cools down.

Read more »

dividends grow over time
Dividend Stocks

TFSA: Invest $20,000 and Get $860/Year of Predictable Passive Income

Looking for safe passive income that will grow and build wealth inside your TFSA. Check out this four-stock portfolio of…

Read more »

Increasing yield
Dividend Stocks

3 Overlooked High-Yielding Dividend Stocks to Buy Right Now

These three dividend stocks are excellent buys, given their discounted prices and high yields.

Read more »

Dad and son having fun outdoor. Healthy living concept
Dividend Stocks

Married? Have Kids? Grab These 5 CRA Tax Breaks

You can transfer dividend income from stocks like Suncor Energy Inc (TSX:SU) to your spouse and enjoy tax savings that…

Read more »

You Should Know This
Dividend Stocks

Why Claiming CPP at 65 Could Be a Mistake

The CPP pegs the start retirement age at 65, but it's not necessarily the ideal option to start pension payments.

Read more »

dividends grow over time
Dividend Stocks

1 Passive-Income Stream and 1 Dividend Stock for $235.30 in Monthly Cash

The easiest way of creating passive income comes from from something you have to do anyway. Add in dividend income,…

Read more »

edit CRA taxes
Dividend Stocks

CRA: This Tax Break Can Help You Save Serious Money in 2024

This tax credit is one you've likely missed in the past but could provide you with thousands each year! So,…

Read more »