Stock market investing can be an excellent tool for building your wealth and accumulating a substantial nest egg to support you in retirement. I think a well-thought-out retirement plan should include a self-directed portfolio of income-focused and reliable long-term holdings.
Bear in mind, no risk-free stocks trade on any stock market worldwide. However, you can build a portfolio of stocks that have the best chance of delivering stable passive income through dividends and growth potential through long-term capital gains. My favourite sectors for such holdings are the banking and utilities industries.
Today, we will take a quick look at two high-quality Canadian stocks that can be long-term holdings to help you retire rich.
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Fortis
Fortis Inc. (TSX: FTS) is my favourite pick among Canadian dividend stocks, let alone being my top pick among utility stocks. The $36.5 billion market-cap company owns and operates several natural gas and electricity utility businesses in Canada, the US, and the Caribbean. Almost all of its revenue comes from long-term contracted assets in rate-regulated markets. That means it has predictable cash flows virtually immune to the impact of broader economic issues.
The company can comfortably fund its capital programs and grow its dividend payouts. Fortis stock has increased payouts to investors for around 52 consecutive years, and it looks well-positioned to continue its streak. As of this writing, Fortis stock trades for $72.47 per share and pays $0.615 per share each quarter to investors in dividends, translating to a 3.4% dividend yield.
Toronto-Dominion Bank
Toronto-Dominion Bank (TSX: TD) is one of my top picks from Canadian banking stocks. Canadian banks, especially TD Bank, have faced several economic crises over the centuries and managed to emerge stronger on the other side. TD has faced the 2008 crash, two world wars, a pandemic, and much more, but it still stands strong. All of this happened without the Bank of Canada intervening or offering a bailout to the bank.
TD Bank stock has a strong presence across retail banking, wealth management, insurance, and wholesale banking. As of this writing, the stock trades for $111,06 per share. The $189.6 billion market-cap stock pays its investors $1.05 per share in dividends each quarter, translating to a 3.8% dividend yield.
The bank continues to double down on its long-term growth initiatives. Its solid capital base, consistent dividend track record, and growth in domestic and international markets make it a strong contender for a long-term holding in a retirement-focused portfolio.
Foolish takeaway
Fortis stock and Toronto-Dominion Bank stock are high-quality investments that are always better fits as long-term holdings. The dividend track records suggest a solid potential for recurring income streams and healthy long-term overall returns. By allocating a portion of the available contribution room in a Tax-Free Savings Account (TFSA), you can enjoy the returns from these investments without incurring taxes on capital gains or dividends.
