There’s no shortage of great Canadian stocks to own on the market. Some could even qualify as buy-and-hold picks.
These are companies that continue to evolve, invest in growth, and have established dividend histories that go back years (and in some cases, centuries).
Granted, safety means something different for every investor. Personally, I want something that the economy will still need for decades to come. If that includes a competitive advantage or moat, that makes it even better.
If I were to then limit that selection process down to just a handful of Canadian stocks that I would buy and hold forever, it would come down to the following four picks.
Source: Getty Images
A duo that has survived generations
The first two Canadian stocks I would consider are Bank of Montreal (TSX: BMO) and Canadian National Railway (TSX: CNR).
BMO is the oldest of Canada’s big bank stocks, with a history stretching back more than 200 years. Throughout that time, the bank has endured across recessions, wars, financial crises, and even the founding of Canada itself.
Today, the bank has operations across both Canada and the U.S. BMO also has wealth management and capital markets operations. This gives the bank multiple ways to generate revenue, which in turn allows it to pay a quarterly dividend.
That dividend, as of the time of writing, offers a yield of 2.8%. Apart from the nearly two centuries of uninterrupted payments, BMO has provided annual upticks to that payout for over a decade.
Turning to Canadian National, the railway operator offers something a little different, and much more defensive. Canadian National operates a massive rail network that stretches across Canada and down through the U.S. Midwest to the Gulf region.
That means it connects warehouses, factories and metro markets across the continent with connections to three coastlines. To say that’s a defensive moat would be an understatement.
To reproduce that network would take billions in investments, decades of construction, and countless regulatory approvals. This gives the railway one of the best defensive moats on the market.
That network hauls over $250 billion worth of goods each year, showing how integrated the railway is into the North American economy.
Canadian National also offers a yield of 2.2%, and like BMO, has provided annual upticks to that dividend for years. In fact, earlier this year Canadian National provided investors with its 30th consecutive annual increase to that dividend.
Another duo with assets the economy still needs
The next two Canadian stocks to consider are Brookfield Infrastructure (TSX: BIPC) and Canadian Natural Resources (TSX: CNQ).
Brookfield gives investors exposure to essential infrastructure that isn’t tied down to a single country or asset class. The company’s portfolio is a global mix of utilities, railways, toll roads, ports, pipelines, and data infrastructure.
Many of those generate regulated or contracted revenue. This means that Brookfield generates a reliable and recurring source of revenue. Even better, some of those agreements include inflation adjustments.
Where Brookfield really excels is as an income play. As of the time of writing, the stock offers a yield of 5%. Brookfield is also targeting annual growth of that payout of between 5% and 9%.
Canadian Natural Resources, on the other hand, offers more direct commodity exposure. For those unfamiliar with the stock, Canadian Natural Resources is one of the major oil and gas producers in Canada.
The company’s portfolio includes long-life oil and natural gas assets in North America, offshore Africa, and the North Sea.
Those assets generate a recurring cash flow that can be substantial when energy prices spike. The low-cost, long-life nature of those assets also means that they produce cash even when prices are weaker.
And like the other companies mentioned above, Canadian Natural Resources has an established record of paying dividends that goes back over a decade. As of the time of writing, Canadian Natural Resources offers a yield of 3.7%.
Are these Canadian stocks truly forever holdings?
None of these Canadian stocks is immune to risk. That being said, each of the companies mentioned above offers defensive appeal and growth potential in addition to growing dividends.
In my opinion, one or all of these Canadian stocks should be core holdings in any well-diversified portfolio.
