Stocks suitable for long-term holding are mainly established and matured companies. The best Canadian stocks to hold for generations on the TSX are the Royal Bank of Canada (TSX:RY) and BCE (TSX:BCE).
RBC is the largest TSX company by market capitalization ($239.2 billion), while BCE is the country’s largest communications company ($30.3 billion). Besides the leadership positions in the respective sectors (financial and communications services), the lengthy dividend history is their common denominator. These wealth-builders can help you achieve financial freedom or secure your financial future.
Most valuable Canadian brand
The size and scale of RBC makes it invincible regardless of the economic environment. Its 155-year dividend track record is proof of financial strength. Moreover, Canada’s banking sector is known globally as a bedrock of stability. At $169.34 per share, the dividend is a safe and secure 3.2% (5 consecutive years of dividend hikes since October 2022).
According to its President and CEO, Dave McKay, RBC relentlessly pursued its ambition to stay ahead of evolving client expectations and create unparalleled value in 2024. “As we enter 2025 from a position of strength, I’m fully confident in Team RBC’s ability to continue going above-and-beyond to support those we serve, each and every day,” he added.
In fiscal 2024 (12 months ending October 31, 2024), revenue and net income increased 11.4% and 11.1% year-over-year to $57.3 billion and $16.2 billion, respectively. At the end of Q4 fiscal 2024, the liquidity position shows a surplus of about $86 billion. The provision for credit losses (PCL) during the quarter rose 16.7% to $840 million compared to Q4 fiscal 2023.
McKay said the acquisition of HSBC Bank Canada is a pivotal milestone and one of RBC’s defining moments in fiscal 2024. It strengthened the bank’s position as a competitive global financial institution. Overall, RY is a premium investment in the Canadian banking landscape.
Based on Fitch Ratings’ rating report on RY in 2024, the Big Bank scored an AA- rating for its robust and established domestic franchise, formidable size and scale, and expansive customer deposit base. RBC is number one in Kantar’s 2024 annual BrandZ ranking of the top 40 most valuable Canadian brands.
Buying opportunity
BCE is a buying opportunity in 2025 as the communications services sector rebounds from its underwhelming performance last year. The industry leader faces challenges but should overcome the headwinds because of its strong asset base and solid foundation via its 5G infrastructure.
In Q4 2024, net earnings rose 16% year-over-year to $505 million. “Bell’s financial results for Q4 and throughout 2024 demonstrate steady execution as we balanced growth with profitability while transforming our business and reducing costs,” said Mirko Bibic, President and CEO of BCE and Bell Canada.
BCE’s shareholder base grew alongside its dividend growth history. Management expects free cash flow to improve in 2025 following a company restructuring and a scaled-back capital spending plan. At $33.25 per share, you can feast on the 12% dividend. The 5G stock is a dividend aristocrat owing to yearly increases since 2008. However, some analysts say a pause in dividend growth is possible.
Generational hold
Canadians should have peace of mind investing in “generational hold” stocks like the Royal Bank of Canada and BCE.
