Several Canadian stocks have delivered returns that exceed those of the broader market this year. But beyond short-term outperformers, there is a group of fundamentally strong companies listed on the TSX that have consistently generated steady capital gains over time. Their resilience across market cycles and disciplined execution have enabled them to outperform the broader indices on a sustained basis, making them attractive for investors seeking reliable, long-term growth.
With this context in mind, here are three Canadian stocks to buy and hold for steady gains.
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Top Canadian stocks #1: Dollarama
Investors seeking steady, long-term growth could consider Dollarama (TSX: DOL). The discount retailer has delivered exceptional performance, with its shares climbing about 47% in 2024 and rising roughly 42.7% year to date. Over the past five years, the stock has compounded at an impressive annual rate of more than 30%, translating into capital gains of more than 276%.
Beyond price appreciation, Dollarama has steadily raised its dividend, enhancing total returns for shareholders. It offers everyday essentials and general merchandise at fixed low prices. This value pricing strategy continues to attract customers across economic cycles, providing resilience and predictable cash flows.
Dollarama is also expanding its store footprint in Canada and abroad. These new stores have quick payback periods and are likely to drive traffic. Further, partnerships with third-party delivery platforms position it well to adapt to changing consumer behaviour and generate incremental revenue. In addition, its diverse sales mix, including private label products, disciplined sourcing, and the recent acquisition of Australia’s The Reject Shop, further strengthens its growth outlook and competitive position.
Top Canadian stocks #2: Aritzia
Aritzia (TSX: ATZ) is another top Canadian stock that has consistently outperformed the broader markets. The fashion retailer consistently delivers solid growth led by strong demand, frequent product refreshes, and a loyal customer base.
Aritzia has delivered double-digit growth in both revenue and earnings since fiscal 2020, with sales rising at a 23% compound annual growth rate (CAGR) and earnings increasing at a 19% CAGR.
This solid financial and operating momentum has translated into exceptional shareholder returns. The stock is up more than 113% year to date and has compounded at 36.2% annually over the past five years, delivering a total capital gain of over 369%. Looking ahead, new boutique openings, digital investments, and an enhanced online platform position Aritzia for continued growth and deliver above-average returns.
Top Canadian stocks #3: Hydro One
Hydro One (TSX: H) is a compelling stock to buy and hold for steady gains. It operates a regulated utility business and primarily focuses on electricity transmission and distribution. This operating structure shields its earnings from economic downturns and commodity price fluctuations, enabling the company to deliver predictable cash flows that support its share price and dividend payments.
The company’s expanding rate base has supported consistent dividend growth. Between 2016 and 2022, dividends increased at a CAGR of 5%, accelerating to nearly 6% annually in recent years. Investors have also benefited from strong capital appreciation, with the stock rising 111.8% over the past five years, translating into a CAGR of 16.2%.
Looking ahead, Hydro One’s rate base is expected to grow around 6% annually through 2027. Ongoing investments in grid modernization, transmission capacity expansion, and renewable energy integration position the company well to benefit from rising electricity demand. In short, Hydro One is a reliable stock for investors seeking stability, growth, and income.
