The holding period for stocks depends on an individual’s primary objective. “Buy low and sell high” is the basic principle, but it applies to investors chasing quick bucks. However, the holding period should be longer for people with long-term financial goals, like retirement.
Long-term stock investing helps you ride out market fluctuations, minimize losses, maximize return, and grow wealth over time. The holding period can take 20 years or even longer if one can reach 100 years. Dividend payers like Canadian Imperial Bank of Commerce (TSX: CM), AltaGas (TSX: ALA), and OpenText (TSX: OTEX) are the stocks you can buy and hold for the next decade.
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Big bank
Canadian investors will likely have at least one big bank stock as an anchor in their Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP). Canada’s Big Five banks have a dividend track record of more than 100 years, and none are in danger of cutting dividend payments.
CIBC is the fifth-largest financial institution in the elite group. The $62.95 billion lender started paying dividends in 1868 and continues to do so. At $66.76 per share (+7.49% year to date), the dividend offer is a juicy 5.39%. A $140,196 investment (2,100 shares) will balloon to $409.052 in 20 years, including dividend reinvestment.
Second-quarter (Q2) fiscal 2024 earnings were impressive, evidenced by the profit growth of all core businesses in Canada and the United States. The top line grew 8% year over year to $6.16 billion, while net income increased 4% to $1.75 billion compared to Q2 fiscal 2023. For the first half of the fiscal year, net income rose 63.85% year over year to nearly $3.5 billion.
Strong fundamentals and stable cash flow
AltaGas is a significant player in Canada’s oil & gas midstream industry. The $9.11 billion energy infrastructure company owns and operates franchised, cost-of-service, rate-regulated natural gas distribution and storage utilities. At $30.77 per share, current investors are up 12.83% and enjoy a 3.87% dividend.
The strong fundamentals and long-term commercial contracts provide stable cash flow. North America’s natural gas supply and natural gas liquids (NGL) demand fundamentals offer excellent opportunities for sustainable capital investment.
In Q1 2024, revenue and net income dipped 9.7% and 10.3% year over year to $3.65 billion and $408 million. AltaGas president and chief executive officer (CEO) Vern Yu said, “Performance in the quarter was ahead of our expectations.” He said the company will continue to operate with an equity self-funding model and commercially de-risk the business by increasing tolling, take-or-pay and fee-for-service contracts.
Rare gem
OpenText is a must-own stock for long-term investors. This tech stock is a rare gem because it pays a decent 3.23% dividend. At $42.45 per share, OTEX trades at a discount (-16.99%). However, a rebound is sure, given the ever-growing Information Management market.
The $11.44 billion company boasts a cloud-based software and solutions platform that covers business network, content, digital experience, security, operations management and developer APIs. Its CEO and chief technology officer Mark J. Barrenechea said OpenText is at the connected ecosystems and the internet of clouds. He expects the business to grow as more customers adopt cloud, security, and artificial intelligence.
Diversified portfolio
Long-term investors can form a diversified portfolio with CIBC, AltaGas, and OpenText. The three large-cap stocks have financial stability and long growth runways.
