Canada Markets open in 7 hrs 59 mins

3 Stocks You’ll Never Sell

Amy Legate-Wolfe
Balloon shaped as a heart

The stock market can be a fickle beast, but it can also be fairly predictable. Especially if you pick the right industries, and the right stocks within those industries. If you time it right, you can have a portfolio full of stocks that will give you immense growth. That’ll leave you with stocks you will never, ever have to sell.

That’s the case for these three recommendations. Each is in an industry that, while it may have some dips, on the whole will continue an upward trend for the foreseeable future. Also, these stocks are set up to make the most gains over the long term, leaving you with a hefty sum when (or should I say “if”) you decide to sell.

So, let’s dive in.


Royal Bank

Royal Bank (TSX:RY)(NYSE:RY) is the kingpin of the banking industry when it comes to stocks. It’s already the biggest bank stock on the S&P/TSX Composite, and that comes largely from the company’s recent expansion into the United States. The bank has focused on wealth and commercial clients, partnering with City National to expand throughout the country. This has set it up to provide high-margin gains over the long-term future.

In the medium term, things still look good for this bank stock. The bank expects to deliver earnings-per-share growth of 7-10% in that time. Of course, the short term is a different story, as analysts are fearful of a recession. That’s sent stocks like Royal Bank downhill fast, especially after earnings reports that could have been better. However, that also creates an opportunity to buy this stock that could reach $130 per share in the next 12 months — growth of 25% as of writing. And don’t forget the 3.89% dividend yield you’ll get in that time.

Enbridge

Another seriously perfect opportunity for investors is Enbridge (TSX:ENB)(NYSE:ENB). The opportunity comes first and foremost from the oil and gas industry, which has had a severe market downturn that continues to plague companies like Enbridge. Secondary to this is the news that the firm’s Line 3 replacement and expansion project is yet again on hold, needing to address further environmental issues.

But analysts believe this and its other growth projects will move ahead and be on schedule to start shipping oil and gas by 2021. Once all online, these pipelines will provide a huge surge in stock price. Beyond that, the stock has long-term contracts that set it up for decades of cash flow. That means not only should share prices increase, but its 6.38% dividend yield is quite safe. The stock should hit $62 per share in the next year once oil rebounds and Line 3 moves ahead, giving investors an increase of 35%.

Canadian Pacific

Finally, we have yet another kingpin of an industry with Canadian Pacific Railway (TSX:CP)(NYSE:CP). The company shares a duopoly on the railway industry in Canada, one that is pretty much impossible to edge in on by another company. But not only has the stock moved at a steady pace over the last few decades for this reason, but it’s made some moves that have set it up for future share growth.

That growth comes from reinvestment and a company shakeup. CP sold assets and restructured is business to reinvest in its infrastructure. This new-and-improved CP has put far more emphasis on bringing cash back into the pockets of its shareholders. The company expects to see double-digit adjusted earnings-per-share growth this year, and this led to an increase in its dividend at a whopping 27.5%, bringing the yield to 1.05%. This confidence from management should have investors confident too that shares will continue an upward trend, despite trading at all-time highs. In fact, it could increase to $350 per share in the next year — a jump of 13% as of writing.

Foolish takeaway

All three of these stocks represent strong industries that set up investors with decades of growth. However, choosing these three stocks gives you the best chance of seeing those rewards quickly in your portfolio. Overall, these stocks should continue trending upward for decades, making them the perfect buy-and-hold-forever stocks.

More reading

Fool contributor Amy Legate-Wolfe owns shares of ENBRIDGE INC. The Motley Fool owns shares of Enbridge. Enbridge is a recommendation of Stock Advisor Canada.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2019