It’s a wonderful lifelong strategy: buy and hold dividend stocks forever

Buying and holding dividend growth stocks for many years (or even decades) is often a strategy that rewards patience and discipline. But in a climate where buying hot stocks and chasing even more interesting themes is a recipe for quick profits, such a patient, slow and steady approach remains out of favor. But that’s exactly why I think there is an opportunity in such an approach, especially given the risks associated with rising market valuations.

As you’ve probably heard, there’s a risk of some kind of AI bubble. And while it’s impossible to know exactly where we are in that bubble, it is true that there is indeed a bubble in the traditional sense (I tend to see it only for AI startups and a few large companies). Either way, I think value is a good choice now that the market is coming off an excellent year. The TSX inx just came off one of the most impressive beats (from the S&P500) over a number of years.

Moving forward with a more value-conscious approach

And while still-modest valuations suggest the TSX Index will deliver even more performance that will beat the S&P 500, I think value investors can navigate the new year a little more cautiously, with an emphasis on better value. And of course, some timely catalysts and some indirect, perhaps less recognized, exposure to the AI ​​revolution could make for a winning stock-picking strategy going forward.

Of course, growth still matters, but don’t let the “growth at any cost” mentality take full control of the stocks you choose for your portfolio, especially when we’re talking about your TFSA (Tax-Free Savings Account), which I think should be reserved for the boldest value ideas you have at any given time.

Here’s a dividend grower that could make sense to buy and hold for decades.

CN track

The two-year stock chart of CN track (TSX:CNR) looks like an absolute train wreck. There really is no sugar coating it. That said, I think the rough terrain of the past two years could act as an opportunity for new investors looking to put new money into a wide-moat company that has been neglected in favor of timely growth plans.

So why worry about CN Rail as it tries to climb out of its year-long hole, when there are far better performing names now operating at a higher level? The big banks have higher returns, more momentum and valuations that are arguably more competitive.

That said, I think 2026 could be a turning point for the railroads, especially if there is rate relief and consolidation activity. Given the objections CN executives had to some proposed deals south of the border, I suspect CN Rail will want to work with a dance partner before its North American rail rivals pick up the rest. There will probably be no new railway undertakings, given the barriers to entry. So if 2026 paves the way for a boom in mergers and acquisitions, we might see one last chance for Big Rail to get even bigger.

With a nice dividend yield of 2.6%, a low price-to-earnings ratio of 18.6 times, and one of the most impressive dividend growth track records in the country, I wouldn’t hesitate to be a buyer at less than $140 per share.