3 Stocks to Buy and Hold for the Next 10 Years

These Canadian stocks have potential to deliver significant returns over the next 10 years and diversify your portfolio.

| More on:
Target. Stand out from the crowd

Image source: Getty Images

Investors planning to buy and hold stocks for the next 10 years could consider shares of Canadian companies with fundamentally strong business and solid growth prospects. In addition, investors should consider diversifying their portfolios to minimize risk and enhance overall returns.

Against this backdrop, here are three Canadian stocks to buy and hold over the next decade. These companies have well-established business models and solid financials and are likely to deliver above-average returns over the long term.

Stock #1

My first pick is goeasy (TSX:GSY), renowned for delivering solid financials and above-average returns. In the last five years, goeasy has returned over 281%, providing an impressive compound annual growth rate (CAGR) of 30.6%. The subprime lender’s ability to deliver double-digit revenues and earnings results in massive capital gains.

For instance, the company’s revenue jumped at a CAGR of over 20% over the last five years, while its earnings per share (EPS) grew at about 28%. Thanks to the leverage from higher sales and earnings growth, goeasy enhanced its shareholders’ value through higher dividend payments.

goeasy stock will likely rise higher in the coming years, owing to its dominant positioning in Canada’s non-prime lending sector. Further, goeasy is poised to capitalize on this large addressable market with its omnichannel offerings, geographical expansion, and diverse funding sources. Additionally, its higher sales, solid credit underwriting capabilities, and operating efficiency will bolter goeasy’s earnings growth, driving its dividend payments and share price.

Stock #2

Alimentation Couche-Tard (TSX:ATD) is another stock worth buying and holding for the next 10 years. The convenience store operator offers a combination of stability, income, and growth. The retailer’s defensive business model and ability to drive traffic in all market conditions drive its financials. Moreover, its focus on strategic acquisitions further drives its financial performance, supporting its share price and higher dividend payments.

Couche-Tard’s revenues have grown at a CAGR of 6.2% over the past decade, while its earnings increased at a CAGR of 15.2%. Thanks to its solid earnings, its dividend per share rose at a CAGR of 25.6% during the same period. Its growing earnings base and focus on enhancing shareholders’ value act as catalysts for its shares.

The momentum in Alimentation Couche-Tard’s business will likely be sustained due to its value pricing strategy, extensive store presence, and focus on improving operational efficiencies. In addition, its acquisitions will likely expand its store base, drive traffic, and accelerate its growth rate, supporting the upward trajectory of its stock.

Stock #3

Investors could consider adding Constellation Software (TSX:CSU) stock to their portfolios for the next decade to generate significant wealth. The company provides specialized software and services across multiple sectors. Thanks to its stellar financials and focus on offering customized software solutions, this Canadian tech company has consistently delivered remarkable growth in the past.

For instance, Constellation Software stock has gained over 276% in five years, delivering an average annualized return of over 30%. In the last 10 years, the stock skyrocketed over 1,756%, witnessing a CAGR of about 34%.

Constellation Software’s diversified portfolio, large customer base, and aggressive acquisition and integration of vertical market software companies position it well to deliver solid financials in the coming years. Its solid financials could continue to drive Constellation Software stock higher.

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.

More on Investing

A man smiles while playing a video game.
Retirement

Retired Canadians: The Smartest Income Stocks to Buy With $5,000

TD Bank (TSX:TD) stock stands out as a dividend stock steal at these prices.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

How to Use Your TFSA to Earn $5,000 Per Year in Tax-Free Income

Are you looking for ways to earn $5,000 in TFSA passive income? Consider rebalancing your portfolio, shifting $20,000 to these…

Read more »

money cash dividends
Dividend Stocks

Dividend Powerhouses: Top Canadian Stocks to Enhance Your Portfolio

Three TSX dividend powerhouses are the top options for Canadians looking to enhance their investment portfolios.

Read more »

HIGH VOLTAGE ELECRICITY TOWERS
Investing

1 Safe Canadian Utility Stock Offering a Secure Yield

Hydro One (TSX:H) stock looks like a worthy bet as the tides get somewhat rougher in Q4 2024.

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

The Best Stocks to Invest $2,000 in Right Now

Do you have some extra cash to invest this month? Here are two value-priced dividend stocks to buy for a…

Read more »

Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks
Dividend Stocks

TFSA: Can You Really Invest $95,000 Tax-Free?

You can, in fact, hold TSX stocks like Alimentation Couche-Tard Inc (TSX:ATD) tax-free in a TFSA. But can you hold…

Read more »

young woman celebrating a victory while working with mobile phone in the office
Investing

TFSA: 4 Canadian Stocks to Buy and Hold Forever

TFSA investors can expect to generate above-average capital gains from these fundamentally strong Canadian stocks.

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

TFSA Investors: 3 Stocks to Turbo-Charge Your Tax-Free Portfolio

The TFSA contribution room can be a significant constraint, and the most practical way to circumvent it is to choose…

Read more »