When it comes to long-term investing, discipline and patience are one of the most important things investors can do. Markets are always unpredictable in the short term, but over the course of a decade, high-quality companies with significant competitive advantages will always outperform the rest.
Because you’re looking for top companies with established businesses, consistent earnings growth and great potential for expansion, these stocks typically don’t explode in value overnight.
However, their reliability and consistency allow them to grow and multiply steadily, turning even small investments into meaningful wealth over time.
So with that in mind, if you’re looking for high-quality companies that you can buy now and keep for decades to come, here are three of the best.
One of the most impressive stocks on the TSX to buy and hold for the long term
There’s no doubt that this is one of the very best stocks for Canadian investors to buy and hold for the long term Dollarama (TSX:DOL).
Dollarama has already returned multiples over the past ten years. Being a discount retailer, it never sees a shortage of demand for its products.
When the economy slows down, consumers naturally shift their habits to purchasing more essentials at discount stores. But these habits tend to persist because people don’t suddenly rush back to paying higher prices as soon as the economy picks up.
Plus, Dollarama isn’t just any discount store; it has built one of the most recognizable brands in Canada, another key reason why it has delivered investors a 523% total return over the past decade.
The track record is undeniably impressive, but the real reason to buy Dollarama stock today is the growth potential for the future. Dollarama not only continues to open 60 to 70 stores annually in Canada, but is now also expanding internationally, which could give it decades of growth potential.
Although the stock is trading at its 52-week high, this makes it one of the best investments patient investors can make today.
An ultra-cheap share with years of growth potential
There’s no doubt that Dollarama is one of the best stocks on the TSX. However, it also trades at a significant premium. That’s not necessarily a bad thing if you plan on holding it for the long term.
But if you’re looking for a stock that offers both strong growth potential and a more attractive valuation, Cargo jet (TSX:CJT) is worth a look.
There are two main reasons why Cargojet could deliver huge returns for investors over the next decade.
First, ecommerce will only continue to grow in popularity, meaning the demand for time-sensitive, overnight shipping has a huge growth runway ahead. And second, Cargojet already dominates the Canadian market, a sector with extremely high barriers to entry.
Furthermore, on top of all that growth potential, Cargojet is trading at an ultra-cheap valuation. Not only does that mean that you can earn significant returns over the next decade as the company expands its operations, but those gains can be multiplied even further because you bought in while the stock was undervalued.
In fact, all ten analysts covering Cargojet today rate the stock as a Buy. Furthermore, the average analyst price of $143.55 is at a premium of more than 70% to where the stock is trading today.
One of the best small cap stocks in Canada
If you’re looking for undervalued companies with significant growth potential and a unanimous buy rating from analysts, another stock worth considering is WELL Health Technologies (TSX: GOOD).
WELL is one of the best stocks for long-term investors to buy because it has tremendous growth potential, a track record of growing both organically and through strategic acquisitions, and because it operates in a key sector, making it highly defensive.
The stock consistently beats analyst expectations for revenue and earnings almost every quarter. In fact, over the past five years, sales have increased from just $32 million in 2019 to $920 million last year. And this year, analysts estimate that revenue will rise another 54%, showing that even as size increases, growth potential isn’t slowing down.
So if you’re looking for high-quality Canadian stocks that you can buy now and hold for years, WELL is definitely one of the best options on the TSX.
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