2 Strong TSX Stocks for Super Long-Term Investing

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) and one other stock are likely to provide steady wealth creation for years to come.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The market may be rallying, but will it last? Investors have been given some tough choices in the last couple of months. Safety and stability are certainly hard to come by in 2020. However, from blue-chip bankers to an overlooked energy investment theme, here are two ways to pack long-term wealth creation in a TSX portfolio.

The case for Big Five bank stocks

Banks are likely to continue to be undervalued, as consumer demand remains low and household debt remains high. While market rallies on vaccine hopes are encouraging, this bullishness masks recessionary dangers. In short, the rip currents beneath the economy are likely to exacerbate the cyclicity of any Big Five bank.

Nevertheless, TD Bank (TSX:TD)(NYSE:TD) is likely to carry on distributing its own reasonably defensive dividends for years to come. It’s also likely to be defended tooth and nail at the federal level in the event of an even deeper market crash. The latter consideration is not beyond the realms of possibility, given the still-inflating cheap money bubble. Factor in the importance of TD Bank to the U.S. economy, too, for extra defensiveness.

TD Bank is synonymous with the dominance of the Big Five in Canadian finance. It’s also the first Canadian bank to be listed as systemically important on an international level. The Financial Stability Board (FSB) granted TD Bank the distinction last year. The move should help to secure investors’ funds in the long term, since the FSB exists largely to oversee risk in the banking sector.

Go long on undervalued commodities

From bust to boom, will the market continue to rally? Or is an even deeper market crash on the way? One way to keep one’s cash safe in the current market is to invest in undervalued energy stocks. But there is one energy investment theme that doesn’t get enough coverage: the nuclear option. Uranium stocks could have masses of upside. There are early signs that names like Cameco (TSX:CCO)(NYSE:CCJ) could even break out.

The pandemic has impacted miners by reducing operations and, thereby, material output. And as commodities bottleneck, their prices rise. It’s a simple equation and one of the basic tenets of commodity investment. This has already been the case for uranium this year. But the real breakthrough will come from government contracts and key industry partnerships.

Nuclear energy already has the backing of key figures such as Bill Gates. There is also the potential for blue hydrogen to go mainstream in the 20s. Blue hydrogen uses non-renewable clean energy sources to split hydrogen for use as fuel. This is different from green hydrogen, a process currently enjoying some media coverage, which uses renewables for the energy-intensive innovation.

Cameco shakes out well in the fundamentals, too. It’s a pure play for long-term wealth in a niche area that could see a rapid ramping up of operations. Uranium upside has three strong bull arguments: the green megatrend, higher uranium prices, and tailwinds from tanking oil. Cameco is well placed to capitalize on all three over the long term.

Should you invest $1,000 in Cameco right now?

Before you buy stock in Cameco, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Cameco wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,058.57!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 38 percentage points since 2013*.

See the Top Stocks * Returns as of 2/20/25

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.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Dividend Stocks

Canadian dollars are printed
Dividend Stocks

Is Passive Income From Stocks Legit? Here’s How Much You Can Really Make

You can get about 5% per year in passive income, maybe more with high-yield stocks like Enbridge Inc (TSX:ENB).

Read more »

dividends grow over time
Dividend Stocks

2 Canadian Value Stocks for 2025

These two value stocks are prime opportunities for investors looking for strength as well as dividends.

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

TFSA $7K: Where to Invest Right Now

TFSA users can invest their $7K annual limits in two profitable large-cap dividend stocks right now.

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

6% Dividend Yield? Buy This Top-Notch Dividend Stock in Bulk!

This top-notch dividend stock offers a high and sustainable yield of about 6%, enabling you to generate resilient passive income.

Read more »

data analyze research
Dividend Stocks

2 High-Dividend TSX Stocks to Buy for Increasing Payouts

For big dividends with increasing payouts, look more closely at TD and CNQ today!

Read more »

Investor wonders if it's safe to buy stocks now
Dividend Stocks

Better Dividend Stock: TD vs. BCE

TSX dividend stocks such as TD and BCE offer shareholders a tasty dividend yield. But which blue-chip stock is a…

Read more »

Make a choice, path to success, sign
Dividend Stocks

Magna International: Buy, Sell, or Hold in 2025?

Magna International stock: A 5.5% dividend yield and a cheap 8.1 forward P/E – Can the automotive sector stock outrun…

Read more »

Senior uses a laptop computer
Dividend Stocks

Claiming a Home Office on Your 2024 Tax Return? Read This First

You may not be able to claim the home office tax credit, but you can claim the dividend tax credit…

Read more »