Tax-Free Savings Account (TFSA) investors want stocks they can buy once, hold for decades, and let compound tax‑free. A handful of Canadian companies have the stability, cash‑flow strength, and dividend durability to earn that rare buy‑and‑hold‑forever status.
Here’s a look at three of the best Canadian stocks to buy and hold for decades. These are stocks that have proven themselves through multiple market cycles and can become anchor investments in any TFSA portfolio.
Consider this bank for income and increasing stability
It’s hard to mention a list of the best Canadian stocks to buy and hold without referencing at least one of Canada’s big bank stocks. The bank stock for investors to consider right now is also Canada’s most international bank, Bank of Nova Scotia (TSX:BNS).
Scotiabank’s larger international segment focus has shifted in recent years from developing Latin American markets to mature North American markets. This shift provides the bank with a cleaner and less volatile pathway to long-term growth.
That’s not to say Scotiabank’s domestic segment isn’t impressive. The bank’s local branch network provides ample earnings. Alongside its wealth management and international segments, this leaves room for growth and a robust dividend.
That dividend is something that Scotiabank has been paying out without fail for over 150 consecutive years. Today, the yield on that dividend works out to 4.28%. The bank has also provided annual upticks to that dividend for over a decade.
For prospective investors, Scotiabank’s reliable dividends compounding tax-free in a TFSA for decades is reason enough to consider what is one of the best Canadian stocks to buy now.
A defensive Dividend Knight
Stocks are given the label of a Dividend Knight when they have provided 50 consecutive years of annual increases. In Canada, there are only two companies that meet that requirement, and Canadian Utilities (TSX:CU) is the one with the longest streak.
That streak currently extends to an incredible 53 years, and the company continues to announce annual increases. As of the time of writing, Canadian Utilities pays out a yield of 4.14%.
A key reason for that impressive streak is Canadian Utilities’s business model.
Canadian Utilities is one of the larger utility stocks on the market. Utilities generate a recurring, stable source of revenue that is backed by long-term, regulated contracts. Often, those contracts last for decades. They also provide Canadian Utilities with the cash flow to invest in growth and to continue paying that handsome dividend.
That predictable recurring revenue stream, coupled with the inflation-resistant appeal of a utility stocks makes this one of the best Canadian stocks on the market.
Investors seeking to add to a TFSA will appreciate the inflation-protected dividends that can be reinvested tax-free to create an income-producing engine over decades.
All aboard the quiet compounder that keeps outperforming
Some of the best investments are those that we interact with directly or indirectly on a daily basis. Everything from raw materials to chemicals, food staples and fuels is transported from factories and storehouses to facilities and ports around the continent each day.
Railways like Canadian National Railway (TSX:CNR) haul nearly $250 billion each year, far more than most people realize. Canadian National’s network extends from coast to coast and down through the Midwest to the U.S. Gulf Coast. This gives the railroad a geographic moat that is hard to beat.
More importantly, it also means that Canadian National is highly defensive. For any would-be competitors, the sheer cost of building a new network through existing cities to a similar scale would take billions of dollars and decades.
Where the railway shines as one of the best Canadian stocks to own in a TFSA is through its dividend, and by extension, growth. Canadian National offers investors a quarterly dividend of 2.78%. That yield may sound lower, but Canadian National’s boasts double-digit growth over the past decade, solidifying its spot on any buy-and-forget list.
Canadian National also offers an impressive three-decade streak of annual increases, making it a solid addition to any portfolio.
The best Canadian stocks to buy and hold
A portfolio built on high‑yield income, defensive stability, and long‑term compounding gives TFSA investors a simple, durable foundation to build on.
In my opinion, one or all of the above stocks belong in any well-diversified portfolio.
