Investing for the long term can be one of the most rewarding financial strategies. However, when selecting stocks for a time horizon of two decades, focus on companies with solid fundamentals, a clear competitive edge in their industry, and the ability to generate sustainable earnings over time. These qualities often translate into resilience during market fluctuations and the potential for above-average returns. So, if you plan to invest $2,000, here are two TSX stocks to consider.
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TSX stock #1
Long-term investors could consider Brookfield Asset Management (TSX:BAM). This leading investment firm has a proven track record of identifying high-potential sectors poised for sustained growth over the coming decades.
For instance, the company is one of the early investors in sectors such as renewable energy, data centres, artificial intelligence (AI) infrastructure, and nuclear power. These strategic investments allow the company to capitalize on emerging trends with multi-year growth potential and deliver solid returns.
The company’s asset-light business model, focus on high-quality investments, and commitment to distributing most of its earnings to shareholders further enhance its appeal. Additionally, Brookfield derives the majority of its distributable earnings from fee-related income, providing stability and predictability for regular payouts and sustained shareholder value.
The company is also growing its credit business, consolidating operations under the Brookfield Credit division. This segment currently manages $245 billion in fee-bearing capital and has plans to grow to $600 billion within five years. Moreover, Brookfield aims to double its business size and reach $1 trillion in fee-bearing capital. This expansion could fuel over 15% annual growth in earnings and dividends. The scaling of flagship funds and an enhanced credit platform will likely support this growth.
The expansion of its capital base and margins will significantly boost its fee-related earnings. Furthermore, the stability of its portfolio will increase, with long-term and perpetual capital anticipated to comprise over 90% of total assets within the next five years. Overall, Brookfield is well-positioned for sustained growth over the next two decades.
TSX stock #2
goeasy (TSX:GSY) is another top TSX stock for long-term investors. The financial services company is known for delivering above-average growth, outperforming the broader markets, and enhancing shareholder value through higher dividend payments.
The company provides leasing and lending services to subprime borrowers. Thanks to its leadership in the Canadian subprime lending sector, wide product range, and large addressable market, the company consistently witnesses solid growth in loan originations, which supports its top line. Moreover, its solid credit underwriting capabilities and operating efficiency drive its bottom line and dividend payments.
Notably, goeasy’s revenue has grown at a compound annual growth rate (CAGR) of 20.1% in the last five years (as of September 30, 2024). At the same time, goeasy’s adjusted earnings per share grew at a CAGR of 29%. Thanks to this growth, goeasy stock has gained over 184.5% in the last five years, reflecting a CAGR of 23.2%. Moreover, goeasy also has a solid track record of dividend payments. goeasy’s dividend increased by about 113% from 2020 to 2023. Furthermore, it raised its dividend by 21.9% in February 2024. Overall, the financial services company has increased its dividends for 10 consecutive years and could continue to maintain this trend given its solid earnings growth potential.
The momentum in goeasy’s business will likely sustain, driven by its omnichannel offerings, geographic expansion, diversified sources of funding, and product expansion. Moreover, goeasy’s focus on higher-quality loan originations and solid credit performance could lead to double-digit growth in its bottom line. In summary, goeasy stock is poised to deliver solid growth and income over the next two decades.
