With so much volatility in the world and the stock market, it can be hard investing over a week, let alone years. Perhaps that is just what the doctor is ordering. Shut off social media, pick good quality companies, and hold them through the tumult.
Investing is truly a long-term game. The two main components to compounding wealth are high-returning, consistent investments and time. The stock market follows the fundamental value of a company over a long period of time. You can only extend that time part by sitting on your hands when the market is wild.
If you want some powerful stocks to hold over the next three years, these stocks should do the trick.
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Fortis: A top power grid stock
Speaking of powerful, Fortis (TSX: FTS) is a major Canadian player in delivering power across North America. 99% of its assets are energy transmission or distribution assets. Basically, it forms the nervous system of the power grid in the jurisdictions it operates.
Fortis is not a big growthy name. You own it because it steadily compounds value and income over time. It is investing around $5.5 billion a year into relatively low-risk, high-return capital projects. It is projecting a 7% compounded annual growth rate (CAGR) in its rate base over the coming five years.
Its stock is likely to deliver mid-single digit stock returns in the years ahead. However, when you add in Fortis’ 3.2% dividend yield and the fact that it will grow that dividend by a mid-single digit rate, you get a stock that could beat the market in the years ahead.
TerraVest: A high-powered compounder
TerraVest Industries (TSX: TVK) has been a powerful stock for long-term investors. It is up 656% in the past five years and 2,028% in the past 10 years. Yet, this stock is down 22% this year.
TerraVest is a gritty industrial business. It sells pressurized tanks, specialized trailers, boilers, and energy services. Its tanks are used in everything from gas stations to LNG terminals to data centres.
These are not exciting businesses. However, its secret sauce is how it can smartly deploy capital at high rates of return. This has been an acquisitive business that typically acquires mom-and-pop manufacturers and turns them into profit machines.
You may have to be a little patient as TerraVest digests several large acquisitions from 2025/early 2026. However, if it can keep duplicating its investment process, this should be a win for shareholders in three years’ time.
Hammond Power: A top stock winning from rising power demand
Hammond Power Solutions (TSX: HPS.A) is another stock powering incredible returns (quite literally). Hammond provides transformers and other power components for the electrical grid. Its stock is up 48% this year and 548% in the past three years.
It has been riding several massive tailwinds including an electric infrastructure renewal cycle, manufacturing onshoring, electric vehicles, and surging data centre/AI demand. There is a massive shortage in transformers in North America, which is driving strong demand.
Hammond is nearing the completion of its recent manufacturing capacity build out, which will mean it can actually better meet demand. This stock has surged and is not cheap. HPS.A stock can be volatile. If you buy it on dips, you can do really well, especially with an extended time horizon.
