The idea of retiring early isn’t just for the ultra-wealthy. With the right financial strategy and long-term investing approach, every investor could build enough wealth to quit the nine-to-five job decades ahead of schedule. The Canadian stock market offers plenty of opportunities, but if your goal is early retirement with minimal risk, sticking to large-cap companies with solid finances and steady cash flow may be a smart move.
In this article, I’ll highlight two large-cap TSX stocks that could set you on the path to early retirement.
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Brookfield Asset Management stock
The first stock you might want to keep an eye on is Brookfield Asset Management (TSX:BAM). With over US$1 trillion in assets under management, this global asset management giant mainly focuses on essential industries like infrastructure, real estate, renewable energy, private equity, and credit.
After climbing by 27.8% over the last year, BAM stock trades at $73.66 per share with a market cap of $120.6 billion. The company rewards its investors with quarterly dividend payouts, with an annualized yield of 3.4%.
Brookfield Asset Management had a strong 2024, pulling in US$4 billion in revenue, while its net profits for the year climbed 18% YoY (year over year) to US$2.2 billion. The company ended the year with a fee-bearing capital of US$539 billion, which stood out as a key driver of its earnings, with its fee-related earnings jumping 17% YoY in the fourth quarter.
Moreover, BAM is continuing to focus on expansion, having raised US$137 billion in new capital in 2024 and deployed US$48 billion into high-growth sectors. These positive factors make it an appealing stock for those looking to retire early with a portfolio built for long-term stability.
CNR stock
Another top Canadian stock pick that could help make early retirement a reality is Canadian National Railway (TSX:CNR). Just like Brookfield, CNR is a dominant player in its industry with a resilient business model.
This Montreal-based transportation and logistics company runs one of North America’s largest railway networks and moves over 300 million tons of goods every year. CNR stock is currently at $141.29 per share with a market cap of $88.6 billion. At this market price, it also offers an annualized dividend yield of about 2.5%.
Now, CNR hasn’t had the best time in the market lately. It’s down over 21% from its 52-week high, and its one-year performance is also in the red.
In the fourth quarter of 2024, the company’s revenue rose 6% sequentially to $4.36 billion, although it was still down about 2.5% on a YoY basis. CNR’s adjusted net profit also saw similar trends, slightly higher than the previous quarter but lower compared to a year ago. These YoY declines came mostly due to weaker volumes and softer freight demand, which the company acknowledged in its latest earnings report.
Despite short-term challenges due to the challenging macroeconomic environment, its supply chain services, intermodal expansion, and network optimization efforts are all focused on strengthening its core business. These factors make it a great stock for the long term, especially for investors aiming to retire early with a reliable income stream.
