3 Stocks That Could Create Lasting Generational Wealth

Canadian National Railway (TSX:CNR) could create lasting generational wealth for its shareholders.

| More on:

Do you want to create lasting generational wealth by investing in stocks?

It’s a challenging goal to achieve, but it can be done.

Historically, the Canadian stock market has returned about 10% per year with dividends re-invested. At that rate of return, it takes 7.2 years to double your money. Over 30 years, you can grow your investments by 1,000% or more!

You can always get your share of the stock market’s returns by investing in index funds. That’s the lowest risk approach possible. But if you want to have a bit more fun with your investments, and maybe outperform the markets if you’re lucky, read on, because I’ll be sharing three TSX stocks that could create generational wealth.

CN Railway

The Canadian National Railway (TSX:CNR) is one of Canada’s best and most important companies. It transports $250 billion worth of goods each and every year, across Canada as well as the United States. One of the things that makes the company reliable is its strong competitive position. CN Railway has only one competitor in Canada. It has a small handful of them in the United States. The company is the only North American rail firm whose tracks make contact with three coasts. It can ship goods from BC all the way down to New Orleans. Finally, like any other railroad, it can ship goods much more cost effectively than trucks can.

CN Railway’s last earnings release was not particularly strong. It showed a 6.6% decline in revenue and an 8.3% decline in earnings. That sent the stock tumbling a bit, but since rail is a cyclical industry, the company’s fortunes should reverse in the future.

Alimentation Couche-Tard

Alimentation Couche-Tard Inc (TSX:ATD) is a Canadian gas station company that is best known for the Circle K chain. It bought the chain from ConocoPhillips back in 2003, and spent the next two decades expanding it all over Canada. Today, Circle K is a common sight in cities nationwide. Over the last 13 years, ATD stock has risen over 1,000%. Past results don’t predict future results, but there is a good chance that ATD will continue to perform well. A big part of why ATD is so successful is because it grows by re-investing earnings rather than by taking on enormous amounts of debt. Management still seems to have this ethos, so the company should be pretty successful going forward.

TD Bank

The Toronto-Dominion Bank (TSX:TD) is a Canadian bank stock I’ve been holding for over four years now. It is cheap, trading at around 10 times earnings and 1.3 times book value. As a bank, it has the potential to grow it’s earnings thanks to the interest rate hikes that the Federal Reserve and Bank of Canada are doing. TD Bank’s most recent quarter saw a big increase in net interest income, along with a smaller increase in adjusted earnings per share (“EPS”). TD has a large U.S. retail business; its peer companies in the U.S. reported strong earnings growth last month, so there’s a good chance that TD’s next earnings release will be satisfactory.

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 Andrew Button has positions in Toronto-Dominion Bank. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Canadian National Railway. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Paper Canadian currency of various denominations
Dividend Stocks

Should You Buy the 3 Highest-Paying Dividend Stocks in Canada?

A few dividend stocks saw a sharp correction in November, increasing their yields. Are they a buy for high dividends?

Read more »

money while you sleep
Dividend Stocks

Buy These 2 High-Yield Dividend Stocks Today and Sleep Soundly for a Decade

These stocks pay attractive dividends that should continue to grow.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

$15,000 Windfall? This Dividend Stock Is the Perfect Buy for Monthly Passive Income

If you get a windfall, after debt investing should be your next top option to create even more passive income!

Read more »

senior relaxes in hammock with e-book
Dividend Stocks

3 Canadian Dividend Stocks for Worry-Free Income

These Canadian stocks have consistently paid dividends, generating a worry-free passive income for investors.

Read more »

people relax on mountain ledge
Dividend Stocks

Invest $10,000 in This Dividend Stock for a Potential $4,781.70 in Total Returns

A dividend stock doesn't have to be risky, or without growth. And in the case of this one, the growth…

Read more »

ETF chart stocks
Dividend Stocks

2 Top TSX ETFs to Buy and Hold in a TFSA Forever

Don't get crazy. Just think simple growth with these two ETFs that are perfect in any TFSA.

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Use Your TFSA to Earn $900 Per Month in Tax-Free Income

This covered call ETF plus a TFSA could be your ticket to high tax-free passive income.

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Turn a $15,000 TFSA Into $171,000

$15,000 may not seem like a lot, but over time that amount can balloon into serious cash.

Read more »