One of the biggest decisions investors are constantly considering when building a portfolio of high-quality TSX stocks is whether to focus more on growth or dividends. And while there are certainly top-notch stocks that strictly offer one or the other, often the very best stocks to buy and hold for the long-term offer a variation of both.
In order for a stock to even begin paying a dividend, it needs to be well-established enough and have a track record of consistent profitability. That alone makes dividend stocks safer and more reliable than many high-risk growth stocks that aren’t yet earning a profit.
However, at the same time, while you want large, well-established businesses in your portfolio, you still want companies with decades of growth potential ahead.
That’s why some of the best long-term investments to buy are dividend growth stocks. These are companies that are reliable and consistently profitable, while continuously expanding their operations.
Furthermore, while you should never worry about the short-term movement of stock prices, established stocks that constantly increase their dividends give you even more confidence in their long-term capital gains potential, since those consistent dividend increases tend to drive steady share-price growth over time.
Therefore, as long as they continue to execute well and expand their operations, they are some of the best and easiest TSX stocks to buy and hold for decades of dividends and growth.
So, if you’ve got cash you’re looking to put to work today, here are two giants that are incredibly trustworthy, yet still have a tonne of growth potential ahead.
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One of the best dividend growth stocks on the TSX
There’s a reason why Enbridge (TSX:ENB) is one of the largest companies on the TSX and one of the most popular stocks among Canadian investors. It’s one of the very best dividend growth stocks investors can buy and hold for decades.
As with any high-quality investment, the number one reason why it’s such an ideal long-term holding is due to its core operations. Not only does Enbridge provide services that are essential to the North American economy, but it’s one of the most dominant players in its industry, and it operates in an industry with massive barriers to entry.
Furthermore, it owns tonnes of long-life assets and earns the majority of its revenue from stable contracts, allowing it to generate significant and predictable cash flow every quarter. Therefore, it can continue investing in expanding its operations to ensure future dividend growth while still returning cash to investors every quarter.
So, not only does it offer a compelling dividend yield of roughly 5.6%, but it’s also increased that dividend every year for three straight decades.
And with Enbridge not just being essential today, but also positioning itself for the future with increasing investments in clean energy, it’s easily one of the best dividend growth stocks on the TSX to own for decades to come.
A top defensive growth stock to buy and hold for decades
In addition to Enbridge, another incredibly reliable TSX giant that offers both an attractive dividend yield and tonnes of long-term growth potential is Brookfield Infrastructure Partners (TSX:BIP.UN).
Brookfield is a lot like Enbridge in many ways. First off, it has a massive and diversified portfolio of essential infrastructure assets. Brookfield’s portfolio is diversified more globally, though, and it’s increasingly been investing in data with assets like telecom towers, fibre optic cables, and data centres.
What really makes Brookfield one of the best dividend growth stocks on the TSX to buy and hold for decades, though, is its disciplined investment strategy and long track record of success.
Brookfield is consistently selling off mature assets it can fetch a premium for, then recycling that cash into new opportunities that it believes are either undervalued, could benefit massively from its expertise or both.
That’s what allows it to offer a 4.9% yield today, along with attractive capital gains and dividend growth potential in the decades ahead.
