The most effective and straightforward approach to becoming a successful investor is to identify the highest-quality stocks on the TSX and commit to holding them for the long term.
By choosing top-performing stocks in Canada, your portfolio can benefit from the stability and growth offered by well-established companies.
These elite stocks typically have strong financials, competitive advantages, and a history of consistent performance, often accompanied by attractive dividends.
Holding onto these stocks over the years allows you to capitalize on both capital appreciation and the passive income they generate, which can compound over time.
This strategy not only minimizes the need for constant monitoring and trading—thereby reducing transaction costs and the stress of frequent market fluctuations—but also aligns your investments with the overall growth of the economy, increasing your chances of achieving significant returns.
That’s why one of my key long-term investments is Enbridge (TSX), one of the best TSX stocks to buy and hold for decades.
Enbridge’s operations are diverse and vital to the economy One of the key reasons Enbridge is such a dependable stock is its massive size, significant competitive advantages, and well-diversified operations that are essential to the economy.
For instance, this $115 billion company has four core business segments. Its liquids pipelines and natural gas pipelines are two of its largest and most well-known segments, transporting about 30% of the crude oil produced in North America and nearly 20% of the natural gas consumed in the U.S.
Despite being a giant in the infrastructure space and a critical player in the North American economy, Enbridge also recognizes the shift toward cleaner energy and has been an early investor in renewable energy, with a growing offshore wind portfolio.
Additionally, its gas utilities and storage segment operates the largest natural gas utility by volume in North America.
These diverse operations provide Enbridge with significant stability. Each segment is reliable and resistant to economic downturns, making Enbridge one of the best TSX stocks to buy and hold for the long term.
Moreover, all these segments generate substantial cash flow for Enbridge, enabling the company to pay a compelling dividend and consistently raise that dividend each year.
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Enbridge is a top TSX stock to invest in Another major advantage of Enbridge’s operations is the long-life assets it owns, such as pipelines and storage facilities. These assets require relatively low maintenance capital expenditures each year, allowing them to generate significant cash flow.
This makes Enbridge one of the top dividend growth stocks on the TSX and a prime investment to buy and hold for the long haul.
The substantial cash flow that Enbridge generates allows it to increase its dividend payments to investors each year, alongside reinvesting in future growth, ensuring continued dividend increases for years to come.
For example, Enbridge has raised its dividend for 27 consecutive years, and over the last five years, the dividend has grown by more than 24%, with a compound annual growth rate of 4.4%.
So not only does Enbridge offer an attractive yield today of around 6.9%, but it also consistently increases the passive income it generates for investors, solidifying its status as one of the top TSX stocks to buy and hold for decades.
The company continues to perform well and demonstrate its resilience. Analysts estimate that its earnings before interest, taxes, depreciation, and amortization (EBITDA) will grow by 10.9% this year and another 5.9% next year.
Additionally, with EBITDA expected to rise significantly in the coming quarters, its forward enterprise value to EBITDA (EV/EBITDA) ratio is currently just 11.4 times, below its 5- and 10-year averages of 12.1 and 13 times, respectively.
Therefore, with this impressive dividend growth stock trading at a reasonable valuation, it stands out as one of the best companies on the TSX to buy and hold for decades.