Some of the best TSX companies for long-term investing are found in the banking and utilities sectors. While no stock is risk-free, you can construct a portfolio that delivers income stability and growth potential.
My personal choices and the only two Canadian stocks I’d hold forever are Toronto-Dominion Bank (TSX:TD) and Fortis (TSX:FTS). TD Bank has repeatedly endured financial crises, whereas FTS is a dividend knight, having achieved 51 consecutive years of dividend increases.
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Crisis endurance
Canada’s Big Six banks, especially TD Bank, fared relatively well during the 2008 financial crisis. Not only did the Bank of Canada not intervene or offer a bailout, but a conservative regulatory environment helped protect the sector from the subprime mortgage crisis.
In 2024, the $193.4 billion bank suffered a setback when it admitted to violating the Bank Secrecy Act in the United States. Due to its failure to monitor money laundering activities, TD Bank paid a US$3 billion fine. The bank stock hit a low point as a result.
As of this writing, TD is up over 50% year to date, indicating a strong recovery from the systematic failure and positive investor sentiment. Also, the case did not disrupt or affect dividend payments. At $111.51 per share, the dividend yield is 3.77%. Note that TD has a payment history of 168 years and counting.
According to Raymond Chun, TD’s new CEO, the bank made significant progress in its U.S. balance sheet restructuring in the third quarter (Q3) of fiscal 2025. The priority is to execute on its anti-money laundering (AML) remediation. In the three months ending July 31, 2025, net income reached $3.3 billion compared to the $181 million net loss in Q3 fiscal 2024.
TD Bank is working double time to regain the full trust and confidence of investors. The U.S. has imposed a five-year probation period before the bank can resume its growth initiatives. Meanwhile, it expects to generate consistent and predictable earnings from the retail and commercial banking business segments.
Low-risk profile
Fortis belongs to an elite group of North American stocks. In Canada, it’s one of two TSX stocks designated as a dividend knight. It offers a 3.44% dividend yield, but for risk-averse investors, dividend safety is more important than yield. At $71.58 per share, FTS investors are enjoying a 23.23% year-to-date gain, which is slightly higher than the broad market’s +22.75% return this year.
The $35.3 billion company operates in a non-cyclical sector. Its defensive nature stems from the predictable cash flow generated by utility operations, where 99% of its assets are regulated. You’d own less-volatile stock regardless of market conditions.
With its new $26 billion five-year capital plan, Fortis expects the midyear rate base to increase from $39.0 billion in 2024 to $53.0 billion by 2029. Along with this long-term rate base growth, management has provided a dividend-growth guidance of 4-6% annually through 2029. Fortis will likewise pursue expansion opportunities beyond the five-year capital plan.
Invest in quality
TD Bank and Fortis are high-quality assets for a long-term, if not a lifetime portfolio. Their dividend track records suggest a strong potential for both healthy long-term returns and recurring income streams for years to come.
