You have been watching a few stocks for years, thinking you will buy them when the price falls to X. However, luck was never on your side, and that dip never came. Instead, that stock grew by leaps and bounds, and you missed the opportunity to pocket those gains. Sounds familiar?
Three stocks to set-and-forget
Don’t delay your investments because you are busy. Investments are a way to put your money to work while you stay busy with family, friends, business, or office. There are a few stocks you can set and forget. They work for you in the background and compound your returns over time.
Constellation Software
An evergreen growth stock that has made its loyal investors wealthy is trading at an unbelievable discount. Constellation Software (TSX:CSU) stock is down 31% from its 52-week high of $5,300.
The most significant reason for the dip is the surprise resignation of its founder and president, Mark Leonard. When a founder of a tech holding company, where business is solely dependent on a person’s skill, exits, loyal investors are bound to get apprehensive. Had the resignation been a proper succession with a gradual handover, investors might not have overreacted. However, there will be more clarity when the new president, Mark Miller, answers investors’ questions on the November 7 earnings call.
Now, Constellation is a buy because Miller is a 30-year veteran in the company, serving as the chief operating officer in his latest role. If he assures investors that there is no change in work culture, business strategy, or approach, the stock could begin a recovery rally.
He has also stated that it will be business as usual, which means the company will continue to acquire vertically specific software companies with recurring cash flows.
Another reason for the dip is the timing of Leonard’s resignation for health reasons. A few days before resigning, he talked about the uncertainty around artificial intelligence‘s (AI) impact on software companies. Being a holding company, Constellation will monitor the developments in AI and look for opportunities that add value. In the long term, growing through acquisitions will increase enterprise value and drive the share price.
Telus stock
Telus Corporation (TSX:T) is an evergreen stock to invest and forget. The telco keeps upgrading and expanding its network infrastructure and grows cash flows by adding new subscribers. It even tackled the regulatory disruption by opening its network to competitors. Telus has reduced its capital expenditure on building new networks and is instead growing its subscriber count by offering its bundled services on competitors’ networks.
The company has been growing dividends for the last 21 years. It also offers a dividend reinvestment plan (DRIP) that gives you shares equivalent to the dividend amount. This way, you accumulate more shares over the years. These DRIP shares also pay dividends. Its share price doesn’t grow much, allowing growing dividends to buy more DRIP shares.
Telus can continue to grow dividends as it has reduced its dividend payout ratio within the target range. It plans to grow dividends by 3–8% from 2026 to 2028. In 10 to 20 years, the compounding effect of a DRIP can give you a significant passive income.
AMD stock
Advanced Micro Devices (NASDAQ:AMD) is a no-brainer stock to buy and forget. The very AI that has brought uncertainty to the long-term growth of software companies is the growth catalyst for AMD. An alternative to Nvidia, AMD has upped its AI game and is catering to all device needs from computers to data centres to embedded devices.
AMD stock made a new high, and valuations are still low compared to other AI chip stocks. AMD stock is trading at a 28.6 times forward price-to-earnings ratio, while Nvidia is trading at 30 times and Broadcom at 36.7 times. The stock has immense potential to tap the AI rally with its complete infrastructure offerings.
