Got $5,000? 3 TSX Stocks to Hold for the Next 20 Years

If you have $5,000 to spare, look for TSX stocks that have a history of stable growth and can build more in the next two decades.

Amy Legate-Wolfe ❯

@amylegatewolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest.

Published July 22, 2022 12:15 pm EDT

It’s been really hard for Canadian investors to see beyond what’s happening on the TSX today. And I definitely understand that. You’re watching your investments, some that you’ve built up for years, fall further and further. But it may be time to shift focus when you’re looking at TSX stocks.

Instead of watching them fall, you need to think long-term into the future. And the best way to do that, is to actually look back at the past! By identifying TSX stocks that have a solid growth path, and a solid future ahead, you can find strong companies to invest in for 20 years or more.

TD stock

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is a great long-term hold. It’s one of the Big Six Banks, each of which has proven time and again that they can get through even major recessions. Further, it offers passive income. So even when the market is down, you can bring in strong income from these TSX stocks.

However, TD stock has done a lot of growing in the last few years. The bank is one of the biggest in the United States, and continues to grow its online presence. During the last earnings report, the company’s earnings increased 3.8% year-over-year. That’s even as interest rates climbed and loans reduced.

Over the last two decades, shares of TD stock have grown 989%. That’s a compound annual growth rate (CAGR) of 12.67%. Further, it trades at just 10.2 times earnings among TSX stocks. Plus it offers a dividend yield of 4.34%.

A $5,000 investment today could be worth $101,587.88 in 20 years with dividends reinvested.

CGI Group

CGI (TSX:GIB.A)(NYSE:GIB) is another strong choice because you can get in on the tech sector. True, it’s down now, but leaves you with a massive opportunity. Especially for a stable company among TSX stocks.

What makes CGI so stable is it mainly grows through the acquisition of small software companies. These companies are located around the world, and are involved in anything and everything from government software to retail. This diverse range means it’s stood the test of time in terms of growth.

In fact, during the last earnings report revenue climbed 6.2% year-over-year. Further, acquisitions have hardly slowed down with the company continuing to announce news ones on a regular basis. Yet it trades at a fair 19.1 times earnings right now among TSX stocks.

Shares of CGI have climbed 1,546% in the last two decades, a CAGR of 15.02% on the TSX. So if you invested $5,000 today, it could be worth $81,296.62 in another 20 years.

Brookfield Infrastructure

Motley Fool investors simply don’t need to worry when it comes to infrastructure stocks. That includes TSX stocks like Brookfield Infrastructure Partners LP (TSX:BIP.UN)(NYSE:BIPC). This company has a diverse range of basic necessities, including utilities, energy assets and water services. These necessary items are needed no matter what, which is why the company has done so well.

Now the stability of this stock has meant that it continues to trade at a fair price even during this bear market. But remember, you’re investing long-term. So this should be of little concern. Plus you still get access to a 3.79% dividend yield.

Shares of Brookfield Infrastructure have climbed 480% in the last decade, for a CAGR of 19.2%. So if you invested $5,000 with your other TSX stocks and reinvested dividends, it could be worth $233,841.48 in the next 20 years.