Most stocks are rented. Investors buy them for a rebound, a hot trend, or one particularly handsome dividend, then head for the exit when the story changes. A forever stock must pass a tougher test. It should still have customers, pricing power, and somewhere useful to invest money long after today’s market darling has become a trivia question.
That usually means owning an essential service, a difficult-to-replicate asset, or a company exceptional at turning capital into more capital. The business should generate dependable cash flow through recessions while still having enough growth to outpace inflation.
Even excellent companies can become terrible purchases at ridiculous prices. Investors buying stocks in Canada should build positions gradually, reinvest dividends, and resist confusing “forever” with “never check again.” Management, debt, regulation, and competition can all change.
No three stocks create complete diversification, either. Yet if I had to choose three Canadian companies to anchor a much broader portfolio for decades, I’d want electricity, waste, and global investment expertise working together.
Source: Getty Images
H
Hydro One (TSX:H) owns and operates much of Ontario’s electricity transmission and distribution system. Homes, factories, mines, electric vehicles, and data centres may disagree on nearly everything, but they remain wonderfully united in needing power.
Ontario’s rising electricity demand is creating decades of potential grid investment. Hydro One was recently selected to develop three priority transmission lines connecting northern communities, new industrial loads, and additional power generation.
First-quarter earnings per share (EPS) increased to $0.65 from $0.60, while the company invested $715 million in its network. The drawback is valuation. Hydro One recently traded around 26 times trailing earnings, a generous price for slow, dependable growth. Debt and regulatory decisions also remain risks, particularly after regulators denied recovery of $69 million in storm-related costs.
WCN
Waste Connections (TSX:WCN) turns one of society’s least glamorous habits into an exceptional business. It collects, transfers, recycles, and disposes of waste for approximately nine million customers across the United States and Canada, concentrating on markets where competition is limited.
Second-quarter revenue climbed 6.4% to US$2.6 billion, while adjusted EPS increased to US$1.50. Management consequently raised its 2026 outlook and has already completed acquisitions representing more than US$100 million in annualized revenue.
Collection routes, permits, transfer stations, and landfills are difficult to recreate, giving Waste Connections useful pricing power. Investors certainly pay for it, with the shares trading near 41 times earnings. Slower volumes, acquisition mistakes, landfill liabilities, or weaker pricing could make that premium feel rather less sanitary.
BN
Brookfield Corporation (TSX:BN) completes the trio by investing in infrastructure, renewable power, real estate, private businesses, and insurance assets worldwide. Its advantage is the ability to raise enormous pools of capital, purchase complicated assets, improve them, and eventually sell or refinance them.
First-quarter distributable earnings before realizations increased 7% to US$1.4 billion. Brookfield also completed its acquisition of Just Group, lifting insurance assets to US$180 billion, while repurchasing shares during market volatility.
Brookfield recently traded around 81 times trailing earnings, although Brookfield’s sprawling structure makes valuation more an art project than arithmetic homework. Leverage, real estate exposure, acquisition execution, and organizational complexity are genuine risks.
Foolish takeaway
These companies would still belong beside ETFs and other investments inside a Tax-Free Savings Account (TFSA). None are immune to a selloff, and Hydro One and Waste Connections currently carry demanding valuations. Gradual buying could turn future weakness into an advantage.
Electricity consumption, garbage production, and global demand for infrastructure capital aren’t likely to retire anytime soon. If these businesses keep reinvesting successfully, patience could allow today’s expensive-looking shares to become tomorrow’s remarkably cheap cost bases.
