When it comes to investing, Canadians who buy and hold long term often enjoy the greatest rewards. Data shows that over 90% of investors who hold for 20 years or more achieve positive returns. Why? Time in the market beats trying to time the market, allowing your investments to ride out short-term volatility and benefit from compound growth. Plus, long-term holding offers more stability, fewer trading fees, and less stress. Perfect for building wealth steadily without having to monitor every market move.
So how do you get started? Consider stocks that offer that long-term growth as an option. Today, we’ll look at three investors can buy without a worry.
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Fairfax
Fairfax Financial Holdings (TSX:FFH) on the TSX is a strong and stable investment choice for long-term holders. With a market cap of $37 billion and a trailing price/earnings (P/E) ratio of 7.3, it’s clear that FFH is priced attractively given its impressive earnings momentum. In fact, quarterly revenue growth year-over-year is 20.8%, and quarterly earnings growth is an impressive 24.6%. A lower beta of 0.83 suggests that FFH is less volatile than the broader market, providing safety even during market turbulence.
FFH’s solid financial position only adds to its appeal. With a 42.7% increase over the past year and a strong balance sheet that includes $8.5 billion in cash, it offers both growth potential and security. The stock also boasts a trailing annual dividend rate of $15.00, with a low payout ratio of 9.2%, ensuring dividends are sustainable. As CEO Prem Watsa famously stated, “We aim to protect our capital while growing it at a reasonable rate,” reinforcing FFH’s reputation as a safe, long-term investment.
Constellation Software
Constellation Software (TSX:CSU) is another standout on the TSX, boasting strong earnings momentum and stability. Over the past year, CSU’s stock price has surged by about 50% at writing, reflecting its ongoing ability to capture market opportunities. With quarterly earnings growth of a jaw-dropping 71.8% year-over-year, CSU has clearly demonstrated its ability to drive long-term profitability. Its return on equity (ROE) of 15.9% underscores the company’s efficient use of shareholder funds to generate profits.
With a market cap of $89.4 billion, CSU holds significant weight, and its forward P/E ratio of 31.6 suggests that future earnings growth is expected to continue. Despite its high valuation, CSU has maintained a relatively low beta of 0.81, making it a safer investment in terms of volatility. As one analyst noted, “Constellation Software has mastered the art of acquiring companies and efficiently integrating them to maximize long-term growth potential.”
Goeasy
Goeasy (TSX:GSY) is another fantastic choice for long-term investors looking for both growth and safety. The company has seen a remarkable 47.9% increase in its stock price over the past year at the time of writing, thus showcasing strong earnings momentum. GSY’s quarterly earnings growth year-over-year is 17.7%, and it has a robust profit margin of 33.4%, demonstrating its efficiency in turning revenue into profit. With a forward P/E ratio of 8.8, it remains attractively priced for value investors.
GSY also shines with its strong dividend history. Offering a forward annual dividend rate of $4.68 and a yield of 2.6%, GSY’s dividend payout ratio of just 27.7% ensures that shareholders can expect continued returns. As one analyst put it, “goeasy is a powerhouse in the alternative lending space, consistently delivering for both its customers and shareholders.” Its solid financials and growing dividend make it a secure investment for those looking to hold long term.
Bottom line
In a nutshell, whether you’re holding FFH, CSU, or GSY, long-term investing with these solid, growth-driven Canadian stocks is a recipe for success. With strong earnings, stable dividends, and impressive momentum, these companies make it easy to sit back, relax, and watch your investments grow over time. Just like the best long-term strategies should!
