When it comes to long-term investing, being disciplined and having patience is one of the most important things investors can do. Markets are always unpredictable in the short run, but over the course of a decade, high-quality companies with significant competitive advantages will always outperform the rest.
Because you’re looking for top-notch companies with well-established operations, consistent earnings growth, and large runways for expansion, these stocks don’t typically explode in value overnight.
However, their reliability and consistency allow them to grow and compound steadily, turning even small investments into meaningful wealth over time.
So, with that in mind, if you’re looking for high-quality companies to buy now and hold for decades to come, here are three of the best.
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One of the most impressive stocks on the TSX to buy and hold for the long term
There’s no question that one of the very best stocks Canadian investors can buy and hold for the long haul is Dollarama (TSX: DOL).
Dollarama has already returned multiples over the last decade. Because it’s a discount retailer, it never sees a shortage of demand for its products.
When the economy slows down, consumers naturally shift their habits toward buying more essentials at discount stores. But those habits tend to stick since people don’t suddenly rush back to paying higher prices once the economy improves.
Plus, Dollarama is not just any discount retailer; it’s built one of the most recognizable brands in Canada, another key reason why it’s earned investors a total return of 523% over the last decade.
Its track record is undeniably impressive, but the real reason to buy Dollarama stock today is for its growth potential going forward. Not only does Dollarama continue to open 60-70 stores annually in Canada, but it’s now expanding internationally as well, which could give it decades of growth potential.
Therefore, while the stock is trading off its 52-week high, it’s one of the best investments that patient investors can make today.
An ultra-cheap stock with years of growth potential
There’s no question that Dollarama is one of the best stocks on the TSX. However, it also trades at a significant premium. That’s not necessarily a bad thing if you plan to hold it for the long term.
But if you’re looking for a stock that offers both strong growth potential and a more attractive valuation, Cargojet (TSX: CJT) is worth a look.
There are two main reasons why Cargojet could deliver massive returns for investors over the next decade.
First, e-commerce will only continue to grow in popularity, which means demand for time-sensitive, overnight shipping has a huge runway of growth ahead. And second, Cargojet already dominates the Canadian market, an industry with extremely high barriers to entry.
Plus, on top of all that growth potential, Cargojet is trading at an ultra-cheap valuation. That means not only can you earn significant returns over the next decade as the company expands its operations, but those gains could be multiplied even further because you bought in while the stock was undervalued.
In fact, all 10 analysts covering Cargojet today rate the stock a buy. Furthermore, its average analyst target price of $143.55 sits at a more than 70% premium to where the stock is trading today.
One of the best small-cap stocks in Canada
If you’re looking for undervalued companies with significant growth potential and a unanimous buy rating from analysts, another stock worth considering is WELL Health Technologies (TSX: WELL).
WELL is one of the best stocks long-term investors can buy because it has tonnes of growth potential, a track record of growing both organically and through strategic acquisitions, and it operates in an essential industry, making it highly defensive.
The stock consistently beats analysts’ expectations for revenue and earnings nearly every quarter. In fact, in just the last five years, its revenue has increased from just $32 million in 2019 to $920 million last year. And this year, analysts estimate its revenue will jump another 54%, showing that even as it increases in size, its growth potential isn’t slowing down.
So, if you’re looking for a high-quality Canadian stock to buy now and hold for years, WELL is definitely one of the best options on the TSX.
