Investors planning to buy and hold stocks for a long period could consider high-quality Canadian companies. Investing in fundamentally strong stocks with robust financials and solid growth prospects can help you generate stellar returns in the long run. Against this backdrop, here are three Canadian stocks investors can confidently buy and hold forever. These companies are likely to deliver above-average returns over the long term.
goeasy
Investors looking for a stock to buy and hold forever could consider goeasy (TSX:GSY). This financial services company has an impressive track record of outperforming the TSX and delivering double-digit growth in revenues and earnings.
In the past five years, goeasy stock has seen a remarkable gain of over 267%, reflecting a compound annual growth rate (CAGR) of about 30%. This growth reflects its solid financials. Its top line grew at a CAGR of over 20% over the last five years, while its earnings per share sport a CAGR of about 28% during the same period. This stellar performance is complemented by its strong history of paying higher dividends.
goeasy’s leadership in the subprime lending market, growing consumer loan portfolio, and steady credit performance position the company for its future growth. The lender’s diversified funding sources and a large addressable market will likely boost its revenues. Further, its focus on geographical expansion and operational efficiency will support goeasy’s profitability. This, in turn, will drive future dividend payments and its share price.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) is known for offering stability, income, and growth, which makes it a top stock that investors can confidently buy and hold forever. The retailer has delivered stellar financials and rewarded its shareholders through higher dividend payments.
For instance, Couche-Tard’s revenues have grown at a CAGR of 6.2%, and its earnings increased by a CAGR of 15.2% over the past decade. Thanks to its impressive financials, it increased its dividend per share at a CAGR of 25.6% during the same period. Propelled by these catalysts, Couche-Tard stock has delivered an impressive capital gain of over 350% in the past decade.
The convenience store operator’s stellar performance is backed by its defensive business model, extensive store presence, and ability to drive traffic in all market conditions. Its focus on strategic acquisitions further expands in store base, drives traffic, and boosts revenues. In addition, the company’s value pricing strategy and focus on improving operational efficiencies further drive its financial performance, supporting its higher dividend payouts and share price.
Canadian Natural Resources
Investors can confidently invest in energy giant Canadian Natural Resources (TSX:CNQ) for steady passive income and solid capital gains. Shares of this Canadian oil and gas company grew at a CAGR of 26.3% and appreciated over 222% over the past five years, outperforming the broader market index. The company’s impressive returns reflect its ability to increase revenue and earnings and drive dividend payments.
Canadian Natural Resources enhanced its shareholders’ value by increasing its dividends for 24 consecutive years. Moreover, its dividend grew at a CAGR of 21%, which is impressive. CNQ stock also offers a decent dividend yield of 4.7%.
The energy company is well-positioned for continued growth owing to its diversified cash flows, high-value reserves, and long-life assets. Further, its ability to grow production will position it well to generate solid earnings, thereby ensuring higher payouts in the future. Moreover, low maintenance capital and a strong balance sheet will support its future growth initiatives and stock price.
