Finding that perfect mix of investments for your portfolio to buy and hold takes time, but if chosen correctly, those stocks can provide income and growth for decades. Fortunately, there’s no shortage of great stocks for Canadian investors to buy.
Here’s a trio of options that should be in every portfolio right now.
Option #1: The defensive utility your portfolio needs
When mentioning buying and holding, it’s hard to not consider a stock like Fortis (TSX: FTS). For those unfamiliar with the stock, Fortis is one of the largest utility stocks in North America.
Utilities generate a reliable and recurring revenue stream that is backed by long-term, regulated contracts. This means that as long as Fortis keeps providing utility services, it will generate a stable revenue stream.
It’s that revenue stream that allows Fortis to invest in growth initiatives and pay out a handsome dividend. It may not sound like the most exciting investment, but it is stable, and that dividend continues to grow.
As of the time of writing, Fortis pays out a quarterly dividend with a respectable yield of 3.98%. This means that investors who drop $30,000 into the stock will generate an income of just shy of $1,950.
More importantly, investors who aren’t ready to draw on that income can reinvest it until needed. This will allow that investment (and your income) to grow on autopilot for what could be decades.
Oh, and let’s not forget that Fortis has provided annual upticks to that dividend for a whopping 50 consecutive years without fail. The company also plans to continue that cadence.
In short, Fortis is the buy-and-hold stock that every investor needs.
Option #2: The buy-and-hold telecom
Canada’s big telecoms represent a stellar option for long-term investors to buy and hold for decades. The telecoms offer a stable business model, juicy dividends and an increasingly necessary service offering.
Specifically, the one telecom that investors should look to invest in right now is BCE (TSX: BCE). BCE is one of the largest of the big telecoms (or the largest, depending on how you measure size).
BCE offers subscription-based services to customers across several different segments. This includes wireless, wireline, TV and internet services. Among those segments, both the internet and wireless segment show significant long-term growth potential.
In fact, both segments have provided record growth over the past several years, particularly as internet and wireless connections have grown in importance. These have added to the overall defensive appeal of BCE.
Turning to income, BCE offers one of the juiciest yields on the market. As of the time of writing, BCE offers an insane 8.58% yield. This means that a $30,000 investment in the stock will return just shy of $2,600 in the first year.
The reason I mention the first year is because BCE has a long-established history of providing annual upticks to that dividend that goes back over a decade. The company has also provided dividends to shareholders for well over a century without fail.
That fact alone makes BCE a great stock to buy and hold for decades.
Option #3: The Canadian big bank expanding more into the U.S.
When mentioning stocks to buy and hold, Canada’s big bank stocks are among the names that come to mind. Bank of Montreal (TSX: BMO), in particular, is the one bank that investors should be looking at right now.
BMO is the oldest of the big banks and has been paying out dividends for two centuries. That phenomenal amount of time extends across multiple pullbacks and boom periods, adding to the whole buy-and-forget appeal.
Today, BMO offers investors a quarterly dividend that carries a healthy yield of 5.05%. And like the other stocks above, BMO has an established precedent of providing investors with annual bumps to that dividend.
Turning to growth, BMO is focused on the U.S. market. Last year, the bank completed the acquisition of Bank of the West, which upped BMO’s presence in the U.S. to 32 state markets. The deal also brought in millions of new customers and billions in deposits.
In short, BMO, like BCE and Fortis, is a great long-term stock to buy and hold for decades of growth and income-earning potential.
