When considering stocks to buy and hold for life, look for Canadian companies with strong fundamentals, a proven track record of growth, and dependable dividend payouts. These kinds of stocks help generate steady capital gains. Moreover, they can provide a steady income, helping you cover everyday expenses or reinvest that income to take advantage of compounding returns over time.
With that in mind, here are three TSX stocks worthy of buying today and holding for life.
Dollarama stock
Dollarama (TSX:DOL) is one of the top Canadian stocks to buy and hold for life. This discount retail chain offers a broad range of everyday items and seasonal goods at fixed, low prices, consistently attracting a wide range of consumers. Its recession-resistant business model and ability to deliver solid growth enable it to generate strong capital gains and return significant cash to its shareholders.
Dollarama stock has generated capital gains of over 300% in the past five years, reflecting a solid compound annual growth rate (CAGR) of approximately 32%. Moreover, since 2011, the Canadian dollar store chain has raised its dividend distributions 14 times.
Looking ahead, Dollarama’s defensive business, value pricing strategy, wide product range, and cost-efficient operations will continue to drive its earnings, supporting its dividends and stock price. Moreover, its focus on geographic expansion will strengthen its reach, continue to attract more shoppers, and drive sales, boosting its financial performance.
Additionally, its robust supply chain network and partnerships with third-party online delivery platforms bode well for future growth.
Fortis stock
Fortis (TSX:FTS) is another top Canadian stock to buy and hold to add stability and enhance the income potential of your portfolio. The electric utility company has diversified rate-regulated assets that generate steady, predictable cash flow, even during economic downturns. Thanks to its high-quality cash flows, the utility company hiked its dividend for 51 consecutive years.
Fortis focuses on energy transmission and distribution, which makes it relatively immune to the risks related to power generation. Furthermore, its ongoing investments in expanding its transmission infrastructure position it well to capitalize on the growing electricity demand driven by data centres.
Further, the company expects its rate base to grow at a CAGR of 6.5%. This will expand its low-risk earnings base, supporting its dividend payments and share price. The company projects its dividend to increase by 4-6% annually through 2029, generating a consistent income for its shareholders.
goeasy stock
Investors could consider adding goeasy (TSX:GSY) stock to their long-term portfolio. This subprime lender has consistently performed well, delivering double-digit revenue and earnings growth. Thanks to its robust financial performance, goeasy has generated significant capital gains and distributed higher dividends.
Notably, goeasy stock has increased by approximately 305% over the past five years. Further, the financial services company has consistently paid dividends for 21 consecutive years. It has consistently increased its dividend in the past 11 years.
goeasy is poised to deliver double-digit earnings growth, driven by an expanding customer base, increased loan originations, diversified funding sources, and improved operating efficiency. The company’s focus on diversifying its lending products, distribution channels, and geographic reach will expand its portfolio and support its growth. Further, its risk-based pricing model is expected to attract more borrowers, enhance customer retention, and reduce credit risk.
Besides its ability to deliver growth and income, it appears attractively priced (at a forward price-to-earnings ratio of 9.6), making it a buy near the current market price.
