It’s bound to be a very busy day in the Canadian stock market, with a federal election set to dominate headlines. And while the outcome of this election will certainly impact the outlook for specific companies and sectors, the good news for long-term investors is that there are plenty of value stocks well-positioned for long-term upside, regardless of who heads into the prime minister seat.
In my view, here are the three top TSX stocks long-term investors will want to focus on instead of the noise over the coming weeks. Each of these companies has a rock-solid balance sheet and pays a considerable dividend yield for those seeking reliable total returns over the long haul.
For those looking at more solid places to put their Tax-Free Savings Account (TFSA) contribution to work this year, here are three great options I’m looking at right now.
Source: Getty Images
Fortis
Fortis (TSX: FTS) continues to be one of my top Canadian stock picks for a wide variety of reasons.
Perhaps the most important factor most investors in the Canadian utility giant continue to focus on is the company’s dividend yield. But beyond its 3.5% dividend yield, it’s also generally true that one of Fortis’s best attributes is the company’s 51-year streak of raising its dividend distribution annually.
This consistent dividend growth alongside relatively robust capital appreciation over the long term positions investors well for reliable and consistent growth over the long term. I think dividends need to be included in investors’ return calculations, and in that respect, Fortis has been an outperformer for many years.
Until folks stop heating and lighting their homes, Fortis’s robust cash flow growth profile will remain in place. And if homebuilding (a key facet of both Liberal and Conservative platforms) does indeed materialize, this is a company that could certainly benefit from these long-term trends.
Enbridge
Another top energy-related name, Enbridge (TSX: ENB) continues to be a pipeline giant I also like for its nearly 6% dividend yield.
As the chart above shows, Enbridge has shown strong performance in recent years as investors have looked for ways to play a more robust trend toward energy independence in North America. It’s also worth noting that companies like Enbridge have largely escaped Trump’s proposed tariffs, with energy imports into the U.S. market likely to remain a key area that will be excused from the volatility-inducing policy shifts south of the border.
For investors looking for greater portfolio stability and less volatile (but still significant) total returns over the long haul, this pipeline giant is one I think is worth adding to at current levels. The stock’s return of more than 50% over the past five years is indicative of how I expect this stock to perform over the next five years, assuming most of the current fundamental economic drivers remain in place.
Toronto-Dominion Bank
Trading at just under $100 per share (but likely to break through this level over the course of the next year, at least in my view), we have Toronto-Dominion Bank (TSX: TD).
Like the other companies on this list, TD Bank does have a substantial dividend yield which currently stands around 4.9%. This yield is one that’s remained relatively stable over time. So, as the bank has hiked its dividend, investors have typically pushed more capital into this leading Canadian bank.
That’s been a beneficial move for long-term investors, who have seen a very similar return from a capital appreciation perspective from holding TD stock as Enbridge. This is a company which remains a pivotal holding for many Canadian investors with index funds, and that’s likely to remain the case for a long time, given the stock’s market capitalization and weighting in most indices.
