Some of the best TSX companies for long-term investments are found in the banking and utilities sectors. While no stock is risk-free, you can build a portfolio that offers income stability and growth potential.
My personal picks and the only two Canadian stocks I would hold forever are Toronto Dominion Bank (TSX:TD) And Fortis (TSX:FTS). TD Bank has weathered repeated financial crises, while FTS is a dividend knight, with 51 consecutive years of dividend increases.
The endurance of the crisis
Canada’s Big Six banks, especially TD Bank, did relatively well during the 2008 financial crisis. Not only did the Bank of Canada not intervene and offer a bailout, but a conservative regulatory environment helped protect the sector from the subprime mortgage crisis.
In 2024, the $193.4 billion bank suffered a setback when it admitted violating the Bank Secrecy Act in the United States. Because TD Bank failed to monitor money laundering, it paid a $3 billion fine. As a result, the bank share reached a low point.
At the time of writing, TD is up over 50% year to date, indicating a strong recovery from the systemic failure and positive investor sentiment. The case has also not disrupted or affected dividend payments. At $111.51 per share, the dividend yield is 3.77%. Please note that TD has a payment history of 168 years and counting.
According to Raymond Chun, TD’s new CEO, the bank made significant progress in restructuring its U.S. balance sheet in the third quarter (Q3) of fiscal 2025. The priority is to carry out its anti-money laundering (AML) clean-up. For the three months ended July 31, 2025, net income was $3.3 billion, compared to the net loss of $181 million in the fiscal third quarter of 2024.
TD Bank is working twice as hard to regain full investor confidence. The US has imposed a five-year probationary period before the bank can resume its growth initiatives. Meanwhile, the company expects to generate consistent and predictable profits from its retail and commercial banking operations.
Low risk profile
Fortis belongs to an elite group of North American stocks. In Canada, it is one of two TSX stocks designated as a dividend knight. It offers a dividend yield of 3.44%, but for risk-averse investors, dividend safety is more important than yield. At $71.58 per share, FTS investors are enjoying a year-to-date gain of 23.23%, which is slightly higher than the broader market’s +22.75% return this year.
The $35.3 billion company operates in a non-cyclical industry. The defensive nature stems from the predictable cash flow generated by utilities, where 99% of assets are regulated. You would own less volatile stocks regardless of market conditions.
With its new $26 billion five-year capital plan, Fortis expects its semi-annual interest base to increase from $39.0 billion in 2024 to $53.0 billion in 2029. Along with this long-term interest base growth, management has provided a dividend growth forecast of 4-6% per year through 2029. Fortis will also pursue expansion opportunities beyond the five-year capital plan.
Invest in quality
TD Bank and Fortis are high-quality assets for a long-term portfolio, if not a lifetime portfolio. Their dividend track records indicate strong potential for both healthy long-term returns and recurring income streams for years to come.
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