While some growth stocks might tempt investors with quick wins, the real wealth builders are those that have the potential to reward patient investors year after year. Many large TSX-listed companies are built on solid business models that have proven themselves over the years. They grow continuously and manage to ride through economic ups and downs without much fuss.
In this article, I’ll spotlight two TSX stocks that tick all the right boxes for a buy-once-and-hold-forever strategy.
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Canadian National Railway stock
When it comes to dependable businesses built for the long term, Canadian National Railway (TSX:CNR) is one of the most reliable, time-tested stocks on the TSX. As the backbone of North American logistics, with a coast-to-coast rail network that connects key ports and industrial hubs across North America, CNR plays a critical role in the Canadian and U.S. economies.
At the time of writing, CNR stock is trading at $129.38 per share with a market cap of $80.8 billion. It offers a quarterly dividend with an annualized yield of 2.7% at this market price. While the stock has dropped nearly 18% over the last year, that pullback could be an opportunity for long-term investors to buy this quality stock at a bargain.
In the second quarter, Canadian National’s revenue dipped 1% YoY (year over year) to $4.27 billion, primarily due to softness in sectors like forest products and metals. However, it wasn’t all downbeat. The company delivered a 5% YoY rise in operating profit to $1.64 billion, while holding adjusted earnings stable at $1.87 per share. Similarly, its operating ratio also improved last quarter to 61.7% from 64% a year ago, which shows it’s managing costs better even in a tricky macroeconomic environment.
Despite recently trimming its full-year earnings guidance to mid- to high single-digit growth, CNR is continuing to invest in long-term growth initiatives. For example, it recently allocated around $3.4 billion toward capital projects, including upgrades across its network.
With a strong balance sheet, a history of shareholder-friendly moves, and exposure to essential sectors, this reliable, large-cap stock could help you create wealth over time.
WSP Global stock
If you’re looking for sustainable growth with a global footprint, WSP Global (TSX:WSP) could be worth considering. This Montréal-based professional services firm offers engineering, design, and advisory solutions across key sectors like infrastructure, energy, and buildings in over 50 countries.
Following a 14% increase over the last year, WSP stock currently trades at $271.19 per share with a market cap of $35.4 billion. Though its dividend yield is only 0.6%, its consistent growth and healthy financials make it a great stock for long-term investors.
In the June quarter, WSP’s revenue jumped 14.6% YoY to $4.51 billion. On the profitability side, the company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped nearly 22% from a year ago to $632.8 million, as it expanded its margin to 18.2%. Strong execution and improved productivity played a big part in that margin expansion.
More importantly, WSP’s free cash flow reached $456.6 million last quarter from just $75.4 million a year ago, and backlog climbed to $16.3 billion. Encouraged by strong financials, the company now expects its full-year adjusted EBITDA to reach the higher end of its $2.50 billion to $2.55 billion guidance range.
Overall, a clean balance sheet, a net debt-to-EBITDA ratio of 1.5, and plenty of room for strategic growth give this Canadian stock a solid position to keep rewarding investors for years to come.
