10 Canadian stocks to own for long-term returns

Some big names and some long-term bets … WP picks out 10 of the best to buy and hold

10 Canadian stocks to own for long-term returns

Passive index investing remains an easy way to gain exposure to some headline companies. But with volatility increasing, uncertainty over the economic reopening, and rates and inflation rising, maybe it’s time to pay more attention to individual companies.

With help from stocktrades.ca, wearetheincrowd.com, and The Motley Fool, WP has picked out 10 stocks that should be worth any investors' attention as they adjust to a post-COVID world.

In no particular order, here are the 10 stocks to watch (prices are in CAD as of May 28, 2021:

1, TD Bank (TSX:TD)

Price: $86.59

It’s not rocket science to think that Canadian financials should form part of your portfolio. But TD Bank represents an attractive, reliable option. It has recovered relatively quickly from the recession as it wasn’t as susceptible to fragilities in the global economy as some of its competitors.

Other names in the Big Six cohort may get more media love, but shares of the $150 billion TD are up nearly 20% year to date and it offers a nice 4% dividend yield. One of the best companies to go with if safe and guaranteed returns are what you're after.

2, Suncor Energy (TSX:SU)

Price: $27.82

Speaking of nice dividends, the energy giant boasts around 4.20%, which is an agreeable source of income with rates so low. For those who bought in when the crude oil market bottomed out, you are likely sitting back, cigar out with a smug grin on your face. However, the long-term potential remains attractive.

In addition to crude, Suncor has invested in all types of energy, from natural gas to renewables, and is undergoing infrastructure upgrades across the country. This means that even if there is another steep decline in crude prices, it has the foundation to survive.

3, Northland Power Inc (TSX:NPI)

Price: $46.36

Staying on the energy theme, renewable is a theme supercharged in 2020. Prices have cooled slightly so now is a good chance to get involved in green energy, which is undoubtedly a topic for now and the future.

Northland has broad exposure to the sector through wind, hydro, and solar renewable energy markets. The stock is up more than 100% over the past five years, with the majority of that growth coming last year. The stock also represents a respectable dividend yield of about 2.7% at time of writing.

4, Barrick Gold (TSX: ABX)

Price: $28.70

Going for gold? Well, you’re not alone. The price per ounce was heading towards US$2,000 at time of writing with many predicting a further surge based on inflation fears and pullbacks in the equity markets.

After turning down an acquisition offer from Newmont Mining, Barrick opted to hold firm and push on – a decision that looks to have paid off. Barrick has a large debt load but interest rates are set to remain low for the foreseeable future, and gold could go even higher.

5, Blackberry (TSX:BB)

Price: $13.54

Let’s swing into tech – and a much maligned name. A former titan (we all remember the phones), its price plunged to $6 a share but topped $13 at time of writing. This is still not exactly awe-inspiring so why the optimism?

The company remains in the middle of an overhaul, shifting away from hardware and concentrating primarily on its software. The Waterloo, Ontario-based firm also has an impressive portfolio of patents that would warrant a huge price tag for any potential buyer. Blackberry is worth the gamble.

6, Shopify (TSE:SHOP)

Price: $1,519

A modern-day tech success story and one of the top-performing Canadian stocks in living memory. Shopify offers an e-commerce platform primarily to small and medium businesses globally. It operates in two primary segments: subscription solutions and merchant solutions. Why go for this when its price is so high?

Well, first of all, the price has come down from its $1,858 February, 2021 high. And despite constantly being labelled overvalued, it has always delivered. Over the past three years, revenue growth has slowed to around 65.1% annually, but this is still a company growing at a rapid pace.

It’s expensive and you are paying a premium for growth but the company still has potential and has a large cash balance to reinvest in its business. Expect price volatility but upside remains strong.

7, Telus (TSE:T)

Price: $27.24

Like Shopify, there are warning notes. Future potential may be capped and one could argue there are better options south of the border. However, it represents the best telcom stock to own in Canada in terms of 5G exposure and overall growth. It’s good exposure to a more pure-play telecom company because, unlike Rogers Communications and BCE, Telus does not have a media division and has business models that drive higher margins like telehealth and security.

The past five years have been tough for Canadian telecoms but compared to its rivals, Telus is in good shape.

8, Roadman Investment Group (TSE:LITT)

Price: $0.040

Roadman represents opportunity for one thing – mushrooms! That’s right, medicinal mushrooms have long been touted as the new marijuana in terms of investment potential with the business projected to become a $11 billion business in the next five years.

This stock appears ahead of the game, having invested in several companies that are integral to the production of medicinal mushrooms. If you believe in this nascent industry’s potential, Roadman is a company to own.

9, Pollard Banknote (TSE:PBL)

Price: $59.29

As a lottery business, owning Pollard might sound like an inherent gamble. While the government benefits the most from lotteries, Pollard is getting a significant piece of the growing iLottery space and is the number two producer of instant lottery tickets in the world.

With high barriers to entry, it is likely to maintain its position while it also has a joint venture with NeoGames, giving provinces and states the chance to operate on the internet. Over the past 5 years, Pollard has grown revenue 13.7% annually, and it's grown its bottom line even faster, with earnings per share growth of 28.8% per year.

If iLottery takes off, Pollard is set to grow into a much larger operation.

10, TFI International (TSE:TFII)

Price: $114.63

A trucking and logistics company, it has more than tripled off its COVID-19 lows. With 31,000 employees, it has 500 terminals across North America. The question is: why still be bullish given the price increase?

During recent mass panic selling, the company put capital to work and went on the hunt for struggling companies, purchasing Gusgo Transport, Fleetway Transport, CCC Transportation, APPS Transport, Keith Hall & Sons, assets of CT Transportation, the dry bulk assets of Grammer Logistics, and assets of MCT Transportation, DLS Worldwide, and the aforementioned UPS Freight business.

Its CEO has been busy! But management believes margins will increase, suggesting plenty of room to grow.