Whether or not it’s feasible to hold a stock virtually forever (multiple decades) is the first question you need to ask before you start looking for stocks you can hold forever.
Time is just one variable when it comes to building a nest egg, but it’s one that you need to rely upon quite a bit if you don’t have a lot of capital to work with. You need to rely upon the consistent and reliable returns of the right stocks over a long period to build a sizable nest egg.
The good news is that there is a decently sized collection of stocks that fit the bill on the TSX. Most of them are large-cap, blue-chip stocks, but there are others as well. Here are two such golden eggs that you may want to consider adding to your portfolio.
A financial stock
With a market capitalization of $3 billion, goeasy (TSX:GSY) is in the mid-cap range. It’s one of the largest alternative financial institutions in the world and caters to the massive, underserved market of people with weak credit.
These people cannot turn to banks for financial products like personal loans and home loans. By catering to this market segment, goeasy has experienced substantial growth and has an enormous geographic footprint right now — about 400 locations.
goeasy is a newly minted Dividend Aristocrat, and it is growing its payouts at quite a decent rate. In the last three years, it has grown the dividend by about 28%, which is more than many dividend payers grow their payouts by in five years. The payout ratio is relatively safe at 27.7% and has remained below 50% in the last 10 years. The current yield is about 2.6%.
However, goeasy is considered a golden egg primarily because of its growth potential. The stock grew by about 215% in the last five years alone, which includes a significant growth spurt and a massive correction phase. The growth is even more impressive if we look at the previous 10 years (almost 700%).
An energy stock
Canadian Natural Resources (TSX:CNQ) is one of the largest energy companies in Canada by market cap and one of the largest in the world by its reserves. It’s an upstream giant with the largest natural gas and crude oil reserves in Canada. It’s also the second-largest natural gas producer in the country.
The energy stock offers both dividend and capital appreciation-based returns. The dividends are more profound, thanks to a compelling dividend history (22 consecutive years of growth) and a decently sized yield of 4.6%.
The capital-appreciation potential is also quite decent if you look at its recent history — it’s 154% in the last five years. The same pace may not continue as the energy bullish phase is waning, but its long-term return potential (with dividends) is quite decent.
Foolish takeaway
The two golden eggs can help you build a sizable nest egg in your Tax-Free Savings Account or Registered Retirement Savings Plan. You can enhance the return potential by reinvesting the dividends back into these companies to grow the size of your stake. This way, when it’s time for you to start receiving dividends in cash, the income would be substantial.
