Canadian investors should treat volatility and the corrections they produce as more of a long-term buying opportunity than anything else. Undoubtedly, it’s very easy to get caught up in the day-to-day fluctuations and find reasons to sell after any less-than-stellar quarterly earnings reveal or uncertain comments made by U.S. Federal Reserve chair Jerome Powell.
Beginning investors should tune out the market-moving noise and focus on a longer-term time horizon. Indeed, there’s a lot of wealth to be made over the course of many decades. And while you’re going to encounter some rough patches in the market, the important thing is that new investors stay invested and add to positions should Mr. Market start discounting stocks in some sort of panic.
In this piece, we’ll check in with three intriguing TSX stocks that may make sense to stash away for years at a time. Though no stock is truly a “forever” holding, I do find the following names as best held over the next 10 years.
Without further ado, let’s check in with three stocks that Canadian investors should feel confident owning for the long haul with their TFSAs, or non-registered accounts.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX: ATD) is a convenience store icon that’s been taking a slight hit in recent sessions following news of its pursuit of fellow convenience store giant 7 & i Holdings (that’s the owner of 7-Eleven stores). Indeed, such an acquisition would entail new share issuance and perhaps a U.S.-listed stock (can you believe Couche-Tard has been a TSX exclusive all these years?).
While share issuance will have a dilutive impact on shareholders, I do think that the resulting convenience store juggernaut could drive synergies that are massive enough to make it all worth the while.
Remember, Couche-Tard’s management isn’t just about making deals just because there’s dry powder sitting on the balance sheet. If the right deal isn’t there, Couche-Tard will simply look elsewhere. And with such a massive, fragmented industry, there are tons of acquisition options out there. In any case, leverage and equity dilution have investors a bit nervous right now.
Though a deal isn’t a certainty given regulatory green lights we’ll need to wait (it could take more than a year for full approval), I do think the latest dip to $80 and change per share is a huge buying opportunity.
Bank of Montreal
Bank of Montreal (TSX: BMO) is a fantastic Canadian bank that just so happened to stumble in the latest quarter. With another round of earnings coming up, BMO will have a chance to top some pretty depressed estimates. If it can (I think there’s a high chance of this), the stock may have a chance to ricochet after its brutal 9% plunge in these past three months.
At 14.1 times trailing price-to-earnings (P/E), shares of BMO come cheap. And with a 5.3% dividend yield, they’re also very bountiful for investors seeking a bank stock to bank on before August comes to a close.
