Some of the best-performing portfolios are the calm and boring ones. Investors rarely need to chase excitement or every headline. Instead, investors of these portfolios can let compounding work without the drama. The key is finding the best TSX stocks to buy for that boring, winning portfolio.
Boring stocks are underrated. They perform well because they operate in sectors where demand isn’t swinging. They provide a necessary product or service that people need, regardless of market conditions.
That results in dependable earnings, which supports steady dividend payments and help long-term compounding.
Fortunately, there’s no shortage of great options on the market to help meet that goal. Here are five great TSX stocks to buy today that can create that boring portfolio.
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Start with a slow-and-steady compounder
Utility stocks are among the best, most reliable names on the market, and Canadian Utilities (TSX: CU) is one of the most boring TSX stocks to own.
Canadian Utilities is a regulated utility, meaning that its earnings are predictable and revenue is tied to long-term regulated contracts that span decades.
As a result, Canadian Utilities has the longest dividend increase streak in Canada, currently extending to 54 consecutive years. As of the time of writing, Canadian Utilities offers a yield of 3.8%.
It’s not an exciting stock to own, but it delivers consistency, which is exactly what should be expected from the best boring TSX stocks to own.
Generating reliable income from energy infrastructure
The second of five TSX stocks to own now is Pembina Pipeline (TSX: PPL). Pembina provides essential midstream services that keep Canada’s energy sector moving.
Pembina’s fee‑based revenue model reduces exposure to volatile price swings. This gives investors a more stable income stream. And just like a utility business, Pembina’s long-term contracts provide consistency.
Pembina’s dividend is supported by those strong cash flows. As of the time of writing, Pembina offers a quarterly dividend with a yield of 4.3%. The company has also provided annual upticks for several years.
This is the cornerstone stock for income seekers
It’s hard to mention a list of TSX stocks to buy and not include Enbridge (TSX: ENB). Enbridge is one of the most widely held income stocks in Canada, and for good reason.
The company offers multiple segments that are defensive, growing, and profitable. That includes Enbridge’s massive crude and natural gas pipeline business, its growing renewable energy business, and a natural gas utility operation.
The bulk of Enbridge’s revenue stems from the pipeline business, which hauls massive amounts of crude and natural gas each day.
The segments provide Enbridge with ample cash flow to invest in long-term growth initiatives and pay one of the best dividends on the market.
As of the time of writing, Enbridge offers a quarterly dividend with a yield of 5.2%. That dividend also comes with three decades of consecutive annual increases, making it one of the top TSX stocks to buy.
Build a wide moat in your portfolio
Just as Enbridge is synonymous with dividend income, Canadian National Railway (TSX: CNR) is often associated with its wide moat and compounding appeal.
Canadian National operates one of the largest railway networks in North America. That network is impossible to replicate, giving the company a powerful, defensive moat. The goods traversing that network are diversified across every sector of the market, connecting nearly every metro market.
Turning to dividends, Canadian National offers a quarterly dividend paying 2.4%. Like Enbridge, Canadian National boasts three decades of consecutive annual increases.
Invest in retail real estate built on stability
Rounding out the TSX stocks to buy now is SmartCentres REIT (TSX: SRU.UN). REITs are great income producers, and SmartCentres is uniquely positioned for that task.
The REIT offers necessity-retail properties anchored by some of the largest retail names in the sector.
This gives the REIT a steady stream of rental income, allowing it to pay investors a handsome monthly distribution. As of the time of writing, that distribution works out to a yield of 6.6%.
Building a boring portfolio of the top TSX stocks to buy
A winning portfolio doesn’t need to be exciting, and the five TSX stocks mentioned above prove that. Instead, they offer defensive appeal and growing income.
In my opinion, one or all should be core holdings in any larger, well-diversified portfolio.
