The idea of retiring early isn’t just for the ultra-wealthy. With the right financial strategy and long-term investing approach, every investor could build enough wealth to quit the nine-to-five job decades ahead of schedule. The Canadian stock market offers plenty of opportunities, but if your goal is early retirement with minimal risk, sticking to large-cap companies with solid finances and steady cash flow may be a smart move.
In this article, I’ll highlight two large-cap TSX stocks that could set you on the path to early retirement.
Brookfield Asset Management stock
The first stock you might want to keep an eye on is Brookfield Asset Management (TSX:BAM). With over US$1 trillion in assets under management, this global asset management giant mainly focuses on essential industries like infrastructure, real estate, renewable energy, private equity, and credit.
After climbing by 27.8% over the last year, BAM stock trades at $73.66 per share with a market cap of $120.6 billion. The company rewards its investors with quarterly dividend payouts, with an annualized yield of 3.4%.
Brookfield Asset Management had a strong 2024, pulling in US$4 billion in revenue, while its net profits for the year climbed 18% YoY (year over year) to US$2.2 billion. The company ended the year with a fee-bearing capital of US$539 billion, which stood out as a key driver of its earnings, with its fee-related earnings jumping 17% YoY in the fourth quarter.
Moreover, BAM is continuing to focus on expansion, having raised US$137 billion in new capital in 2024 and deployed US$48 billion into high-growth sectors. These positive factors make it an appealing stock for those looking to retire early with a portfolio built for long-term stability.
CNR stock
Another top Canadian stock pick that could help make early retirement a reality is Canadian National Railway (TSX:CNR). Just like Brookfield, CNR is a dominant player in its industry with a resilient business model.
This Montreal-based transportation and logistics company runs one of North America’s largest railway networks and moves over 300 million tons of goods every year. CNR stock is currently at $141.29 per share with a market cap of $88.6 billion. At this market price, it also offers an annualized dividend yield of about 2.5%.
Now, CNR hasn’t had the best time in the market lately. It’s down over 21% from its 52-week high, and its one-year performance is also in the red.
In the fourth quarter of 2024, the company’s revenue rose 6% sequentially to $4.36 billion, although it was still down about 2.5% on a YoY basis. CNR’s adjusted net profit also saw similar trends, slightly higher than the previous quarter but lower compared to a year ago. These YoY declines came mostly due to weaker volumes and softer freight demand, which the company acknowledged in its latest earnings report.
Despite short-term challenges due to the challenging macroeconomic environment, its supply chain services, intermodal expansion, and network optimization efforts are all focused on strengthening its core business. These factors make it a great stock for the long term, especially for investors aiming to retire early with a reliable income stream.
