3 TSX Stocks You Can Hold for the Next 3 Decades

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Stock market price action has not been all that positive this year. In fact, the iShares S&P/TSX 60 Index ETF, as a proxy for the Canadian stock market, has broken through important support and now appears to be consolidating below resistance. It would have to break above that resistance around $31 to go higher. Despite strong results from the energy sector, the Canadian stock market is still down 13% year-to-date.

Market corrections are not necessarily a bad thing. Sure, investors can feel the pain of falling holdings. However, if you own stocks with underlying businesses that are well positioned to increase your long-term earnings, market crashes it should be seen as an opportunity to buy more shares.

here are three TSX Stocks you can hold for the next three decades with the potential to grow your wealth by generating strong total returns.

red blood cell stock

no surprise that Royal Bank of Canada (TSX:RY)(New York Stock Exchange: RY) will be worth more over time. In fact, he increased his profits and paid increasing dividends in the long run. The leading bank has a strong foundation of diversified businesses in personal and commercial banking, wealth management, capital markets, insurance, and treasury and investment services.

RBC’s dividend history dates back to 1870! Its 10-year dividend growth is respectable at a compound annual growth rate (CAGR) of 7.6%. The economy is absorbing high inflation and rising interest rates right now. Stocks are therefore generally depressed, fearing a higher probability of a recession, which is generally defined as two consecutive quarters of negative gross domestic product.

In any case, RBC shares are a good value for long-term investors, offering a 4% dividend yield. Although not yet at bargain prices, it can still generate total returns at a CAGR of about 11%, 4% from the dividend and an earnings-per-share growth rate of about 7%, according to management’s forecast.

Fortis shares

Investors can also take the opportunity to buy fortress (TSX:FTS)(New York Stock Exchange:FTS) with a better valuation in the fall. So far, it is down about 13% from its 52-week high.

The regulated utility company generates predictable and stable earnings. Therefore, it rarely goes on sale. Fortis stock is so reliable that it has increased its dividend every year for nearly half a century! Its 10-year dividend growth rate is 5.9%. For the next several years, its low-risk capital plan also supports similar dividend growth.

The stock is getting awfully close to a 4% dividend yield. In fact, if you assume a 6% dividend increase at the end of this month, your forward yield would be up just over 4%. The fact is that 4% is not worth that much now in a high inflation environment.

The stock could fall further in the short term, but if you expect inflation to come back down to the target of around 2%, Fortis stock would be a good buy for stable long-term returns and dividends.

Brookfield Asset Management Stock

Deglobalization is driving inflation. COVID disruption and supply chain issues have added fuel to the fire. Interest rates remain low compared to historical levels. High inflation will result in higher interest rates which, in turn, could lower inflation. This means a higher cost of capital for companies and a drag on corporate profits, especially companies that require a lot of capital. However, the global alternative asset manager Brookfield Asset Management (TSX:BAM.A)(New York Stock Exchange: BAM) expects to benefit as their operating experience is worth more in this environment.

BAM, with its roots dating back to 1899, has navigated different economic environments and prospered. This time it will be no different. In spite of the long cape Growth stocks are down 17% year to date, BAM has posted a 10-year growth that outperforms the market with a CAGR of 17.9%.

The company’s goal is to offer compound annual returns of 15% or more to long-term shareholders. As such, investors should consider buying their shares on market corrections for more market-beating returns.

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