RRSP Investors: 2 Stocks to Buy Now and Forget for Decades

Waste Connections Inc. (TSX:WCN)(NYSE:WCN) and another top Canadian stock are great candidates for a low-maintenance portfolio. Here’s why.

| More on:

Canadian investors want to build a comfortable retirement portfolio.

Some people simply pay a professional to look after their retirement planning, while others prefer a more hands-on approach. This can certainly save a few bucks by eliminating fees, but it also requires allocating serious hours for research and portfolio management.

In order to minimize the amount of helicopter time we spend over the holdings, it helps to own a few buy-and-ignore stocks. Let’s take a look at two companies that might be interesting picks.

Waste Connections (TSX:WCN)(NYSE:WCN)

As the name suggests, Waste Connections is in the business of looking after garbage. The company operates removal and transfer services for businesses and households in Canada and the United States. Waste Connections also has a division that specializes in cleanups for energy companies.

The firm continues to grow through acquisitions, and investors should see more deals in the coming years as the industry consolidates. At present, the business serves six million customers in 40 states and six Canadian provinces.

Waste Connections reported Q2 2018 adjusted net income of $0.65 per share, representing an increase of 18.2% over the same period last year. Management just upgraded the revenue, earnings, and free cash flow outlook for 2018, given the strong start to the year and positive pricing trends in the solid waste segment.

The garbage business is relatively recession resistant, so Waste Connections should be a good contender for a buy-and-forget spot in your portfolio.

Investors who’d bought the stock just five years ago paid about $35 per share. Today, it trades for about $103, and the move has pretty much been a steady upward trend.

Canadian National Railway (TSX:CNR)(NYSE:CNI)

CN is the only rail company in North America with tracks that connect to three coasts. This is an important advantage that is unlikely to change.

Why?

Attempts to merge railways tend to get blocked by competition watchdogs, and there isn’t much chance of competing lines being built along the same routes. CN isn’t void of competition; the company battles for business with the trucking industry and with other rail carriers on some routes. Overall, however, it’s a sweet business with a wide moat.

As the economy expands, CN should prosper, and management is making the necessary investments to ensure the company can meet rising demand for its services. The 2018 capital program is about $3.5 billion, roughly equivalent to one-quarter of revenue.

CN generates significant free cash flow ($1.3 billion in the first half of 2018) and has a fantastic track record of sharing the profits with investors. The compound annual dividend-growth rate is about 16% over the past 20 years.

The stock currently trades for $116 per share. Ten years ago, it was $26, adjusted for splits.

The bottom line

Waste Connections and Canadian National Railway should be reliable buy-and-hold picks for a self-directed RRSP investors who don’t want to hover over their holdings every day.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Fool contributor Andrew Walker has no position in any stock mentioned. Canadian National Railway is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »

how to save money
Dividend Stocks

The Smartest Dividend Stocks to Buy With $200 Right Now

These smartest dividend stocks can consistently pay and increase their dividends in the coming years, irrespective of the macro uncertainty.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

3 Utility Stocks That Are Smart Buys for Canadians in November

These utility stocks benefit from regulated businesses and generate predictable cash flows that support higher dividend payouts.

Read more »

Start line on the highway
Dividend Stocks

Invest $10,000 in This Dividend Stock for $600 in Passive Income

Do you want to generate passive income? Forget the rental unit! This option will save you the mortgage yet still…

Read more »

Senior uses a laptop computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

TD Bank (TSX:TD) shares are way too cheap with way too swollen a yield for retirees to pass up right…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Is Brookfield Infrastructure Partners a Buy for its 4.75% Yield?

Brookfield Infrastructure Partners (BIP) has a 4.75% dividend yield. Is it worth it?

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »