Stock market investing is never a one-size-fits-all endeavour. If you are starting to invest, you might feel tempted to invest in the hottest names in the market for quick gains. While making rapid profits is a possibility, it is not a viable strategy. The truly savvy investors know the value of patience with stock market investing.
Sure, you can count on growth stocks to deliver quick returns. However, they are riskier investments than most others. There is also a long-term approach to investing whereby you buy shares of companies, hold them in your portfolio, and simply watch them grow over the years. You might not get quick returns, but you can get the kind of capital gains that foster sustainable wealth growth.
Today, I will discuss three stocks that might not be the most exciting, but offer something better for those with a long investment horizon.
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Hydro One
Hydro One Ltd. (TSX:H) is a $30.6 billion market-cap utility company that owns and operates regulated transmission and distribution assets in Ontario. With over 1.5 million customers in its service area and the province itself holding half of its ownership, Hydro One is a government-backed utility giant. You can count on the stock to stick around, regardless of what is happening in the broader economic picture.
Hydro One offers a good mix of stability, growth, and income. The stock pays investors $0.33 in dividends per share each quarter, translating to a 2.6% dividend yield. As of this writing, H trades for $50.96 per share, and it is up by 14.4% year-to-date. Considering that it is a utility stock, the uptick is quite impressive and makes it an attractive investment.
Brookfield Infrastructure Partners
Brookfield Infrastructure Partners (TSX:BIP.UN) is a $22.6 billion market-cap giant. The limited partnership owns and operates a diversified portfolio of high-quality and long-life assets generating stable cash flows. It is a big player in the infrastructure space. While BIP is relatively new, established in 2007, it is a well-capitalized company. Its segments comprise utilities, transport, midstream, and data. It generates revenue from several international markets.
The company’s wide economic moat lets it consistently acquire high-quality assets for value and monetize mature investments. The result is a growing portfolio of appreciating assets that also generate stable cash flows. As of this writing, BIP.UN stock trades for $48.90 per share and offers US$0.43 per share each quarter in dividends, translating to a 4.3% dividend yield.
Manulife Financial
And finally, there’s Manulife Financial Corp. (TSX:MFC). Manulife is a $77.1 billion market-cap company in the life insurance and wealth management space. Operating in Canada, the US, and Asia, it is one of Canada’s Big Three life insurance companies. While it might not have made big news, it has had a fantastic year. As of this writing, shares of the stock are up by almost 23% from its 52-week low. The insurer’s latest quarterly earnings saw it report an uptick of 72% in its earnings per share from the same quarter last year.
Well-capitalized and diversified across several international markets, Manulife is also a reliable dividend stock. As of this writing, it trades for $45.40 per share and pays its investors $0.44 per share each quarter, translating to a 3.9% dividend yield.
Foolish takeaway
While none of the above make headlines as breakaway investments making millions for investors overnight, they have important qualities. The underlying businesses have the kind of discipline to spend and manage capital wisely, boast solid balance sheets, and create recurring revenue. To make it even better, the stocks offer reliable dividends.
Held in a Tax-Free Savings Account (TFSA), investments like these can grow your wealth over the years without incurring taxes. Buying and forgetting these stocks can give you the wiggle room to dabble with riskier growth stocks.
