Choosing the right stocks is one of the most important facets of retirement planning, and it reflects your overall investment approach. If you focus more on rapid growth, you may pick stocks that might also carry a higher degree of risk. Conservative investors may sacrifice growth pace for certainty, which is not necessarily a weak strategy, especially if you have a lot of time to grow your investments.
So, if you are looking for slow and reliable stocks that can help you build wealth over time and carry relatively little risk, three stocks should be on your radar.
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A utility stock
Utilities are a safe business to invest in since they are (usually) regulated, and the revenue stream (i.e., consumer billing) is highly reliable and is not influenced by the broader economy. Fortis (TSX:FTS) comes with even more layers of safety than a typical utility stock. It has an impressive presence, covering 10 markets, and a massive consumer base of 3.4 million customers.
Its financials are quite healthy, and 99% of its utilities are regulated, further strengthening its financials and dividends, which are the crown jewel of its return potential.
Fortis is close to becoming a Dividend King in the U.S. and Canada by growing its payouts for 50 consecutive years, and both its dividend history and financials make its payouts rock solid. The stock also offers modest capital appreciation and has grown over 70% in the last decade.
A telecom company
Telus (TSX:T) is a telecom giant in Canada that offers a very attractive combination of dividends and capital-appreciation potential. The stock rose by about 53% in the last 10 years, and its overall returns for the period were 138%, revealing the generosity of its dividends. It’s also an established Dividend Aristocrat currently offering an attractive 6% yield.
It’s important to note that both its high yield and less-than-ideal capital-appreciation potential can be attributed to the massive 31% discount the stock is currently trading at.
Like other 5G stocks in Canada, it is well positioned to take advantage of the Internet of Things (IoT) industry. It’s also diversifying its operations and exploring new growth opportunities, like home security and telehealth.
A bank stock
Bank stocks in Canada are an all-time investor favourite thanks to their stability and amazing dividends. The largest banks are also among the largest securities on the TSX, and the leader of the bunch, Royal Bank of Canada (TSX:RY), is worth considering as a long-term holding for multiple reasons.
As the largest Canadian bank by market cap and the largest publicly traded company in Canada, Royal Bank of Canada has a lot of credibility and ample weight.
It has performed well in the last two major financial crises, and despite its massive size, it was the second-best growing bank among the Big Six in the last 10 years. It has grown by over 100%, and if you add the dividend, the overall growth climbs to 195%.
- We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Royal Bank of Canada made the list!
Foolish takeaway
The three blue-chip giants are among the safest and most trusted investments you can make in Canada. All three are established Aristocrats, and even though their long-term growth potential is not flashy, it’s quite consistent and resilient against weak market conditions. So, if you can hold these stocks in your portfolio for two or three decades, they can help you with predictable wealth building.
