10 Best Canadian Stocks To Hold Forever (Feb 2023)

Whether you’re a beginner or advanced investor, you can still achieve your investment goals by parking your cash in some tried and true Canadian stocks.

And if you are looking for the best Canadian stocks to hold forever, there are some that stand out from the rest.

Best Canadian Stocks You Can Hold Forever

Based on certain characteristics (see below this list), I’ve chosen the top stocks that most Canadian investors can buy and hold forever

1. Royal Bank of Canada Stock

RBC logo
  • Ticker: RY.TO
  • Sector: Banking
  • Industry Niche: Private and Commercial Banking, Wealth Management, Capital Markets  
  • Core Strengths: Sector leader, strong national and international penetration
  • Forward Dividend Yield: 4.05%
  • Dividend Payout Ratio: 39.86%
  • Dividend Yield (12-Month Trailing): 3.64%
  • Upcoming Dividend Date: Feb 24, 2023
  • Market Cap: $191.04 Billion
  • Forward P/E Ratio: 10.89

Royal Bank of Canada reigns as the largest TSX stock and the largest Canadian bank by market cap (and in a few other areas). It has been around since 1869 and is rooted deep in the community.

Today, it has a presence in over 29 countries and caters to 17 million customers. It’s the top bank for Canadian high and ultra-high-net-worth individuals in Canada, the top investment bank in the country, and the 11th largest investment bank in the world.

It has an enormous presence, and it’s leveraging that presence quite smartly by growing its presence in the digital banking arena, which is likely to be its key focus for future organic growth. It’s also large enough to nudge the market its way instead of swaying in the headwinds.

Based on its historical performance, its return potential is more reliable than generous. In the last decade, between May 2012 and May 2022, the bank grew its investor’s capital by about 165%, and if you add in the dividends, the returns were roughly 292%.

A yield is usually a decent number, and so far, it has grown its payouts (yearly) by roughly the same margin as most other banks, so it’s not lagging behind, and the income can certainly beat inflation.  

2. Canadian National Railway Stock

Canadian National Railway Stock
  • Ticker: CNR.TO
  • Sector: Industrial
  • Industry Niche: Rail Transport (Freight), Trucking   
  • Core Strengths: Powerful regional presence, a core link in the North American supply chain
  • Forward Dividend Yield: 1.78%
  • Dividend Payout Ratio: 37.02%
  • Dividend Yield (12-Month Trailing): 1.84%
  • Upcoming Dividend Date: Mar 31, 2023
  • Market Cap: $107.40 Billion
  • Forward P/E Ratio: 18.72
  • Average Analyst Rating: 2.8 - Hold

The 19,500-mile railway track that CNR controls connects three coasts, and the company transports roughly 300 million tonnes of cargo each year. It practically serves as a significant cargo artery network in North America.

It has expanded its reach by developing a solid trucking arm with over a thousand owner-operators and 8,000 containers and chassis (each).

The company is also relatively financially stable and able to survive in most economic conditions, thanks to its business model. Since it carries a wide variety of cargo, it’s relatively immune to temporary downturns in any individual industries it caters to.

The revenue is also quite diversified, with only about a third coming from cargo circulated within the two countries it serves (the US and Canada). Another feather in its cap is its focus on the environment and ESG.

The stock has been growing quite consistently for the last two and a half decades. It saw a price hike of about 248% between May 2012 and May 2022.

If it stays the same for the next three decades, you can grow from $20,000 to around $148,000. The yield is usually relatively low so try to buy it at a discounted price.

3. Brookfield Asset Management Stock

Brookfield Renewable Partners Stock
  • Ticker: BAM.TO
  • Sector: Financials/Capital Market  
  • Industry Niche: Asset Management
  • Core Strengths: A global presence, focus on evergreen and futuristic asset classes

From a subsidiary of a utility company in Brazil in 1899 to an asset management giant in Canada today (with $725 billion worth of assets under management), Brookfield has seen enormous growth over the years.

Its portfolio of assets is spread out over five continents and more than thirty countries, and it’s more than just a token presence.

But even more impressive than size is the assets the company focuses on, i.e., infrastructure and renewables, one of which is evergreen, and the second is the future.

It also has real estate and financial assets, but infrastructure and renewable dominate, with each having its own dedicated subsidiary.

The company is quite safe and growing. The financials are strong, and they are likely to become even more so in the future as renewables become more common and early birds like Brookfield start reaping the reward.

Between May 2012 and May 2022, the stock grew its price by about 3.4x. The overall growth is even more pronounced (if you add in the dividends).

The yield is rarely high enough to become a deciding factor, but the powerful capital appreciation potential makes up for it.

4. Alimentation Couche-Tard Stock

  • Ticker: ATD.TO
  • Sector: Consumer Staples 
  • Industry Niche: Convenience Retailers
  • Core Strengths: One of the world’s largest convenience store chains, diversified portfolio
  • Forward Dividend Yield: 0.77%
  • Dividend Payout Ratio: 12.44%
  • Dividend Yield (12-Month Trailing): 0.46%
  • Upcoming Dividend Date: Dec 15, 2022
  • Market Cap: $60.16 Billion
  • Forward P/E Ratio: 15.75
  • Average Analyst Rating: 2.0 - Buy

One of the world’s largest convenience store chains with over 14,000 stores in 26 countries, has a humble beginning. It started as a single store in Laval, Quebec, in 1980. Early on, it experienced growth mainly in Quebec.

It slowly expanded its reach within North America, which included the acquisition of Circle-K, a US-based brand the company acquired in 2003. Circle-K is the primary international arm of Alimentation.

The third major brand in the business is Ingo, which covers 440 automated fuel stations in Sweden and Denmark (diversification).

Alimentation has a natural moat against most adverse market dynamics as a consumer staples business.

The geographical diversification, even within the home region (North America), is another major strength. Even with the rise of e-commerce, convenience stores are expected to stay relevant for decades if they can adapt.

Alimentation stock has been a robust grower. Between May 2012 and May 2022, it rose by around 740%.

Even if it grows only half as well in the next three decades as it did in the last one, it will still outperform most decent growth stocks on the TSX.

5. Telus Stock

Telus Stock
  • Ticker: T.TO
  • Sector: Telecom   
  • Industry Niche: Wireless, Wireline, Cable
  • Core Strengths: Strong national presence, limited industry competition
  • Forward Dividend Yield: 4.68%
  • Dividend Payout Ratio: 102.98%
  • Dividend Yield (12-Month Trailing): 4.64%
  • Upcoming Dividend Date: Jan 03, 2023
  • Market Cap: $40.94 Billion
  • Forward P/E Ratio: 20.44
  • Average Analyst Rating: 2.1 - Buy

Telus is one of the three telecom giants in the country. It has 9.29 million mobile phone subscribers, 2.27 internet subscribers, and over 800,000 security system subscribers.

The company has a diversified business model; it’s a strong player in the constantly growing 5G space. It already dominates in an area (home security) where its competitors don’t have a significant presence (diversification).

Its safety comes from a relatively saturated market where it’s challenging for a new player to break in. It’s actually growing its TV subscribers in this age of streaming services.

And with 5G intersecting with IoT, it’s expected to see a decent rise in the number of subscribers.

Telus stock is a modest grower at best, especially considering the other stocks on this list, but it’s equally consistent.

It has been steadily growing for well over two decades and offers a healthy combination of dividends and capital appreciation potential. Between May 2012 and May 2022, it grew by about 111%.

6. Constellation Software Stock

Constellation Logo
  • Ticker: CSU.TO
  • Sector: Tech  
  • Industry Niche: Vertical Market Software Solutions  
  • Core Strengths: Powerful and consistent growth history, resilience
  • Forward Dividend Yield: 0.24%
  • Dividend Payout Ratio: 20.31%
  • Dividend Yield (12-Month Trailing): 0.17%
  • Upcoming Dividend Date: Jan 11, 2023
  • Market Cap: $50.57 Billion
  • Forward P/E Ratio: 30.89
  • Average Analyst Rating: 2.1 - Buy

Constellation has been one of the most consistent growers on the TSX in the past two decades. Between May 2012 and May 2022 the stock price rose by over 2,000%, which far outstrips the bulk of the growth stocks trading on the TSX.

It also offers dividends, but the yield is usually well under 1%.

Constellation is in the business of acquiring software companies and products. The current Constellation is made up of companies, each of which caters to a wide range of industries and geographic markets.

One of them is Topicus, which is a publicly-traded company itself and caters primarily to the European market.

Constellation’s focus is on vertical market software solutions, which has allowed it (or its companies) to become well-known names in some of the industries it caters to.

7. Franco-Nevada Stock

Franco-Nevada Stock
  • Ticker: FNV.TO
  • Sector: Materials (Metal and Mining)  
  • Industry Niche: Gold Streaming And Royalties  
  • Core Strengths: Sheltered from market risks compared to miners, Linear growth
  • Forward Dividend Yield: 1.00%
  • Dividend Payout Ratio: 31.44%
  • Dividend Yield (12-Month Trailing): 0.65%
  • Upcoming Dividend Date: Mar 30, 2023
  • Market Cap: $36.52 Billion
  • Forward P/E Ratio: 37.58
  • Average Analyst Rating: 2.4 - Buy

Unlike gold mining companies, which dominate the industry in Canada, Franco-Nevada is relatively sheltered from some inherent vulnerabilities of typical gold stocks.

That’s thanks to its business model of royalties and streaming instead of directly being involved in the process of mining.

That’s also the reason why the Franco-Nevada stock offers relatively linear growth compared to the cyclical growth of most gold stocks, which spike when the market is down (usually) and falls in a healthy market.

As one of the largest companies of its kind in the world (gold royalty and streaming), Franco-Nevada is not just safe, but it’s also flexible.

Since its stake in gold mining operations is purely financial, it can make relatively quick changes in its portfolio compared to gold miners, that have to spend years and millions of dollars on developing and then operating a mine.

It can also make very strategic investments, like locking better than market rates by offering financial assistance to distressed mining operations.

The stock has been a healthy and consistent grower for the last fifteen years or so. Between May 2012 and May 2022, it returned roughly 289% to its investors through price growth alone.

8. Intact Financial Stock

Intact Financial Stock
  • Ticker: IFC.TO
  • Sector: Financials (Insurance)  
  • Industry Niche: Property and Casualty (P&C) Insurance   
  • Core Strengths: P&C insurance leader in Canada, diverse portfolio of insurance products
  • Forward Dividend Yield: 2.09%
  • Dividend Payout Ratio: 25.85%
  • Dividend Yield (12-Month Trailing): 2.01%
  • Upcoming Dividend Date: Dec 30, 2022
  • Market Cap: $34.19 Billion
  • Forward P/E Ratio: 15.18
  • Average Analyst Rating: 2.3 - Buy

Another stock that offers a decently healthy combination of modest growth and equally modest dividends is Intact Financials.

The company is on this list primarily because of its consistency of growth, its leadership position, and growth potential in the future.

Intact Financial stock offered significantly more consistent growth in the last twelve years (since the great recession) than other insurance giants in the country like Manulife or Sun Life, though its focus, i.e., P&C, might have contributed to that.

It’s the largest P&C insurer in Canada, with a growing presence in the US, UK, and Ireland. It has multiple brands and companies working under its banner and catering to different market segments.

It’s a well-established aristocrat that usually offers a modest, around 2% yield, which you can change to a much more decent number by buying the dip. Between May 2012 and May 2022, it saw a price growth of around 190%.  

9. Fortis Stock

Fortis Stock logo
  • Ticker: FTS.TO
  • Sector: Utilities
  • Industry Niche: Regulated Utilities (Electricity and Natural Gas)   
  • Core Strengths: Second-oldest aristocrat, solid consumer base   
  • Forward Dividend Yield: 3.56%
  • Dividend Payout Ratio: 79.92%
  • Dividend Yield (12-Month Trailing): 3.85%
  • Upcoming Dividend Date: Mar 01, 2023
  • Market Cap: $26.45 Billion
  • Forward P/E Ratio: 18.6
  • Average Analyst Rating: 2.8 - Hold

Fortis can easily be considered one of the best Canadian stocks to hold forever for beginners and seasoned investors alike, primarily for its stellar dividend history.

It has been growing its dividends for more decades than most companies have paid dividends. It also has a relatively consistent track record with growth going back as far as 1995, albeit the growth is slower, especially compared to other rapid growers on this list. Between May 2012 and May 2022, the stock rose by about 94%.

It’s also one of the safest holdings on this list. Utility companies are inherently safer compared to most other businesses, especially the ones that deal primarily with regulated utilities.

Even a slow increase in consumer numbers can lead to solid growth in the financials. It already has 3.4 million utility customers through 10 different operations in Canada, the US, and the Caribbean.

And the diverse geographical presence also affords it more growth opportunities in the future.

10. Algonquin Power & Utilities Stock

Algonquin Power and Utilities Stock
  • Ticker: AQN.TO
  • Sector: Utilities
  • Industry Niche: Regulated Utilities (Electricity and Natural Gas), Power Generation
  • Core Strengths: Focus on renewable power generation, diverse portfolio of assets
  • Forward Dividend Yield: 5.21%
  • Dividend Payout Ratio: 131.23%
  • Dividend Yield (12-Month Trailing): 7.05%
  • Upcoming Dividend Date: Jan 13, 2023
  • Market Cap: $6.76 Billion
  • Forward P/E Ratio: 12.36
  • Average Analyst Rating: 3.2 - Hold

Algonquin covers both ends of the electric utility business. Through its renewable energy business wing, it generates power from multiple renewable sources, including hydroelectric, wind, and solar.

It also distributes electricity through its regulated services business. It also caters to natural gas and water utility customers (including wastewater treatment).

By covering all the basics, the company may have spread itself a little thin, but it’s already paying off and will pay off even more in the future as more of its renewable projects are completed and its production capacity grows.

The stock has been a steady grower since its inception, and apart from a stagnant patch around the pandemic, it has mostly gone up at a decent pace. Between May 2012 and May 2022, the stock price rose about 188%.

What’s even more impressive is its yield, which is usually relatively high, despite its decent growth potential.

Compared to Fortis, the company it most naturally resembles, Algonquin offers a much better combination of capital appreciation and dividends, though it doesn’t have Fortis’ history.

Honourable Mentions for the Best Canadian Stocks to Hold Forever

These companies that couldn’t make the cut in this list but are definitely worth considering as the best Canadian stocks to hold forever are:

  1. Thomson Reuters
  2. Enbridge
  3. National Bank of Canada
  4. BCE
  5. OpenText
  6. Metro
  7. Goeasy
  8. Boyd Group Services
  9. Granite REIT
  10. Toromont Industries

Characteristics Of The Best Canadian Stocks To Hold Forever

The core characteristics of the best Canadian stocks you can hold forever are more broad than just the valuation. Some characteristics of the forever Canadian stocks are:

Return Potential

The return potential is simply their capital appreciation potential for pure growth stocks. For dividend stocks, the overall return potential includes both components.

A dividend stock might only grow 3% a year. Still, if it’s also returning you 4% of your invested capital in the form of dividends every year, it’s comparable and, in some ways, even better than growth stocks offering a 6% a year growth rate.

You can use the dividends as a passive income source or use DRIP to grow your stake in the company.

When you consider the overall return potential of an aristocrat, you should also take the dividend growth rate into account. Comparing it to inflation can give you a more realistic view of the overall long-term return potential.

Safety

Determining how “safe” a stock is can be challenging. Metrics like beta only give you an understanding of a stock’s correlation or dissociation with the broad market at a given time.

A leadership position in the market is a strong marker of relative safety and a strong indication of competitive advantages, but even it falls short in some circumstances. Look for companies with an economic moat, so they are less vulnerable to competitors.

Organic Growth

Many successful blue-chip businesses reach a point of saturation at which, if they don’t radically change course and evolve the right way, they start dying. Nokia and Blueberry can be considered examples that loosely followed this phenomenon.

So it’s imperative that, when you are looking at an investment that you can virtually hold forever, you also look at its organic growth potential and whether it’s adapting to the changing market conditions of the business without straying too far from its core competency.

Historical Performance

“Past performance is no guarantee of future performance.” This is the most common disclaimer you are likely to see with investment instruments like funds and even individual stocks, and it’s true.

But historical performance is also the best source of information you need to determine whether it’s a business you can count on for decades.

You can see how the stock behaved in different types of crises, like recession and pandemic, and sector-specific problems like the 2014-2015 energy sector crash.

A dividend stock’s payout history and whether they sustained their dividends when the ratio crossed over the safe threshold.

Even dips and subsequent recoveries offer crucial insights regarding a stock’s tenacity and resilience.   

FAQs

When it comes to buying the best Canadian stocks to hold forever, many investors have the same questions:

What Is The Best Stock To Hold Forever?

Royal Bank of Canada, Canadian National Railway, Constellation Software, Fortis, and Franco Nevada – Any one of these five stocks can be the best choice as a forever stock holding.

Which Is The Best Stock To Invest In For the Long-Term?

The best stock to invest in long-term is resilient in adverse market conditions and offers a healthy return potential.

What Are The Safest Canadian Stocks To Buy?

Industry leaders like the Royal Bank of Canada, BCE or Telus, Alimentation Couche-Tard, Brookfield Asset Management, and Franco-Nevada are some of the safest Canadian stocks you can buy.

How To Buy the Best Canadian Stocks To Hold Forever

The cheapest way to buy stocks is from discount brokers. My top choices in Canada are:

Readers Choice
Qtrade
  • 105 commission-free ETFs to buy and sell
  • Excellent customer service
  • Top-notch market research tools
  • Easy-to-use and stable platform 
Low Fees
Wealthsimple Trade
  • Stock and ETF buys and sells have $0 trading fees
  • Desktop and mobile trading
  • Reputable fintech company
  • Fractional shares available
Well-Rounded
Questrade
  • ETF buys have $0 trading fees
  • Excellent market research tools
  • Most types of registered accounts available

To learn more, check out my full breakdown of the best trading platforms in Canada here.

The cheapest way to buy stocks is from discount brokers. My top choices in Canada are:

Readers Choice
Qtrade
  • 105 commission-free ETFs to buy and sell
  • Excellent customer service
  • Top-notch market research tools
  • Easy-to-use and stable platform 
Low Fees
Wealthsimple Trade
  • Stock and ETF buys and sells have $0 trading fees
  • Desktop and mobile trading
  • Reputable fintech company
  • Fractional shares available
Well-Rounded
Questrade
  • ETF buys have $0 trading fees
  • Excellent market research tools
  • Most types of registered accounts available

To learn more, check out my full breakdown of the best trading platforms in Canada here.

Conclusion

The best Canadian stocks to hold forever can find a place in the portfolios of most Canadian investors, from extremely conservative ones to highly daring ones.

They are a diversified group of assets you can park all or most of the savings you are planning on growing for your retirement.

For another excellent list, check out the best dividend stocks in Canada.

Photo of author
Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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