Long-term investing can be an effective wealth-building strategy, allowing investors to look beyond short-term market volatility and harness the power of compounding. It also reduces the need for frequent portfolio adjustments, potentially lowering transaction costs and minimizing the impact of short-term market fluctuations. However, successful long-term investing requires careful stock selection, focusing on high-quality companies with well-established businesses, resilient financials, and sustainable growth prospects.
Against this backdrop, let’s explore three high-quality stocks worth acquiring and holding for the long term for attractive returns and sustainable wealth creation.
Source: Getty Images
Fortis
First on my list is Fortis (TSX: FTS), which serves 3.5 million electricity and natural gas customers across Canada, the United States, and the Caribbean. Its highly regulated asset base, focused on low-risk transmission and distribution operations, provides stable, predictable financial performance across economic cycles. This resilience has helped Fortis generate an average annual total shareholder return of approximately 9.8% over the past 20 years while extending its dividend-growth streak to 52 consecutive years. The utility currently pays a quarterly dividend of $0.64 per share, translating into a forward yield of 3.4%.
Looking ahead, economic growth, transportation electrification, and the rapid expansion of AI-driven data centres could support rising electricity and natural gas demand. Fortis plans to invest $28.8 billion through 2030, which could expand its rate base at an annualized rate of 7% to $57.9 billion. These investments, combined with operational efficiencies, could support steady earnings and dividend growth. Management expects to raise its dividend by 4%–6% annually through 2030, reinforcing Fortis’s potential as a dependable long-term income and growth investment.
Dollarama
Another compelling long-term investment is Dollarama (TSX: DOL), which operates 1,734 stores across Canada and another 414 in Australia. Its efficient direct-sourcing model, streamlined operations, and optimized logistics help keep costs under control while enabling the retailer to offer a broad range of products at attractive prices. This value proposition has supported resilient same-store sales across economic cycles and varying macroeconomic conditions.
Dollarama also has significant room for expansion, with plans to increase its Canadian and Australian store counts to 2,200 and 1,050, respectively, by the end of fiscal 2034. Its capital-efficient business model, rapid sales ramp-up, and relatively modest store-maintenance requirements could allow this expansion to translate into sustained revenue and earnings growth. Additionally, Dollarama stands to benefit from its 60.1% stake in Dollarcity, which aims to expand its network from 781 to 1,050 stores by fiscal 2031. With multiple avenues for growth and a resilient operating model, Dollarama could be a compelling long-term investment.
Bank of Nova Scotia
My final pick is Bank of Nova Scotia (TSX: BNS), a diversified financial institution offering a broad range of banking and financial services across multiple markets. Its diversified revenue base supports relatively stable cash flows, while its long-standing dividend track record – dating back to 1833 – underscores its commitment to returning capital to shareholders. The bank has increased its dividend at a 4.5% annualized rate over the past decade and currently offers a forward yield of 3.5%.
Scotiabank is also repositioning its business toward more profitable North American markets while reducing its exposure to less-profitable Latin American operations. This strategic shift could improve the quality and stability of its earnings over time. Additionally, a relatively high-interest-rate environment could support net interest margins and lending income. The bank is also advancing a share-repurchase program targeting 15 million shares, or approximately 1.2% of shares outstanding. Combined with its dividend, the buyback could further enhance per-share earnings and shareholder returns, strengthening the case for Scotia as a long-term investment.
