Want Decades of Passive Income? 3 Stocks to Buy Now and Hold Forever

Do you need an income boost? Here are three great Canadian stocks that will deliver passive income and capital gains for the long term.

Robin Brown

Robin Brown has been a Motley Fool contributor since January 2020. He has lived in Canada, Norway, and Australia where he studied theology and business management. Robin works as a commercial real estate manager, as well as an investment research advisor for a private investment manager. Today, he provides equity research and analysis for a private family office. He enjoys traveling, hiking, fishing, and spending time with his wife and children.

Published June 7, 2025 9:00 am EDT

If you want decades of passive income, you need to find stocks in companies that could produce decades of income. Some of the best places for income are stocks that have predictable businesses that generate lots of cash. This can come from operating assets like pipelines or real estate. It can also come from selling essential services like insurance or power.

Look for companies with smart managers, a prudent strategy, an enduring balance sheet, and opportunities for steady growth. If you want passive income that can be sustained for years, here are three stocks to buy and hold for the long term.

An insurance stock for years to come

Intact Financial (TSX: IFC) may not have a high dividend yield at 1.7%. Yet, it has grown its dividend annually for 20 consecutive years. It is hard to argue that this stock is not worth holding for years to come.

Intact is Canada’s largest provider of property and casualty insurance. Vehicle insurance is mandated by law, and housing insurance is mandated by lenders and landlords. Intact has a goal to take 30% of the Canadian market. Right now, it has about 18% of that share.

With scale, it can underwrite policies at attractive rates for consumers. The company manages a low operating ratio and generates strong returns on equity. For a well-managed business, this is a great stock to hold for growth and passive income.

A top railroad for passive income and capital gains

Canadian Pacific Kansas City (TSX: CP) has been in business for 144 years. Even after a century, there is still no replacement for CP’s essential rail network. How else can you cost-efficiently transport bulk goods and commodities?

CP is one of the best-managed railroads in North America. It has the only network that sprawls across Canada, the United States, and Mexico. That provides it with substantial long-term competitive advantages. It is the only railroad projecting earnings per share growth in the teens.

CP only has a 0.82% dividend yield. Yet, its annual dividend per share is up 171% over the past decade. Its dividend growth stalled after its Kansas City Southern acquisition.

However, after raising its dividend per share by 20%, CP resumed its dividend-growth trajectory in 2025. For a combination of steady capital growth and nice passive income, CP is a solid business to hold.

A stock for higher passive income yield

If you are looking for a stock with a higher dividend yield, Pembina Pipeline (TSX: PPL) might be one to consider for the long term. It yields 5.5% today.

Pembina operates a network of crucial infrastructure for the Western Canadian energy sector. Energy producers need to process, prepare, and ship their products to market. Pembina provides the collection, processing, and egress optionality to do that.

Pembina generates steady, predictable income and produces a lot of free cash flow. Consequently, it has one of the best balance sheets amongst its peers. This affords it significant optionality about how it invests in growth. Its Cedar LNG export terminal is expected to be a big success.

Pembina has been delivering a low single-digit dividend growth over the past several years. If you just want passive income and modest capital returns, this is a great stock that you can buy and tuck away for decades ahead.