What’s the ideal Canadian dividend stock to stash away in a portfolio for a lifetime or even multiple generations? It’s tough to find stocks worth holding for numerous years, let alone numerous decades, but if you’re an extremely long-term investor who wants to build serious, generational wealth over the very long haul, I do think some names stand out.
Of course, with the AI revolution threatening to upend industries (think the software scene), I’d look for highly certain businesses that aren’t going to change (and if they do, it ought to be for the better of margins and sales growth) by all that much as a result of transformative new technologies that go above and beyond AI. Indeed, from quantum computing to the space economy, nanotechnology, and advanced biotechnology, there are many emerging themes to keep close tabs on over the next couple of decades.
And while I do think it’s always worth conducting analysis well after you’ve purchased shares to stay informed about your thesis and how it could change as a result of new events that will eventually fly into the radar, I do think that predictability is almost as important as the calibre of management teams.
Over the years and decades, top bosses are bound to change, so investors had better be sure that they’re in it for the strong business fundamentals that go above who’s in charge. Indeed, key person risk, in particular, is something to assess carefully.
While that doesn’t mean you should steer clear of Elon Musk’s companies or anything similar, I do think that holdings worthy of a “forever” holding period need to be predictable growers with tech-resilient economic moats and many decades’ worth of resilience.
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Bank of Montreal
At this juncture, I’m a big fan of Bank of Montreal (TSX: BMO), thanks to its very lengthy history of dividend hikes, its growth potential in the U.S. market, and, perhaps most underrated of all, its AI savvy. The bank might not be the highest on the global AI rank for banks, but it’s climbing up the ranks quite quickly, and with promising new initiatives that could save the bank serious money over time, I certainly wouldn’t want to venture a bet against the name, especially with its rally running so fiercely.
I never would have thought that shares of BMO would be going for more than 19.5 times trailing price-to-earnings (P/E). But that’s where we are today, with the once dirt-cheap bank now going for a fairly growthy multiple.
Given how the growth profile has changed, I still think BMO stock is worthy of the premium, especially when you consider the potential margin growth engine on the commercial side. Like other big banks, AI is a real value creator for the bank. And I do think that BMO is one of the Big Six players that could surpass its 2030 milestones.
The bank is equipping all of its employees with AI with the goal of meaningfully increasing earnings. In due time, I do think that automation could help AI-induced earnings hit an inflection point, so to speak. Of course, time will tell, but all considered, BMO is one of the big banks I’d be willing to hold for decades.
