2 of the smartest Canadian stocks to buy and hold forever

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Market volatility is slowly rising, as evidenced by the erratic behavior of the Toronto Stock Exchange in recent weeks. Rising oil prices to as high as its three-month high boosted the energy sector and pushed up Canada’s main stock index to start the week of September 27, 2021.

Factors other than the pandemic have emerged to threaten or shake the market. Nonetheless, this should not deter people from staying invested or prevent them from investing. Over the past six months, the finance and consumer staples sectors have shown resilience. Both are up more than 8% in the past 30 days amid uncertainties.

Today, the smartest investment choices are Imperial Bank of Commerce of Canada (TSX: CM) (NYSE: CM) and North West Company (TSX: NWC). You can buy shares of the pair, ignore the noise of the market, and hold onto the shares forever. Their stock prices could drop due to investor sentiment, but this will not disrupt the payment of dividends.

Large, resilient bank

CIBC is the most stable, if not the best performing large bank stock this year. Canada’s fifth-largest lender pays a 4% dividend and enjoys a 38.3% gain, so far in 2021. During the market close in March 2020, the price fell to $ 62.22 . Investors did not abandon the stock because they knew it would recover.

The $ 65.56 billion bank cut losses as expected. Its current price of $ 145.67 is 134.1% above its COVID low. The price target for market analysts over the next 12 months is between $ 148.51 (+ 1.9%) and $ 170 (+ 16.7%). Plus, the 19,560.27% (11.42% CAGR) total return over the past 48.82 years should give you the confidence to invest in CIBC.

CIBC was the only major bank to report net income growth of more than 300% in the second quarter of fiscal 2021 compared to the second quarter of fiscal 2020. For the nine months ended July 31, 2021, revenue and net profit growth compared to the same period last year was 5.7% and 80.3%, respectively.

Management announced on September 27, 2021 that former Minister of Innovation Navdeep Bains would serve as vice president of Global Investment Banking. Navdeep joins former Cabinet Minister Lisa Raitt as a member of CIBC’s Senior Advisory Team.

Resilient like never before

North West Company is an obvious buy regardless of the economic environment. The $ 1.66 billion retailer has endured deep recessions and downturns throughout its 353-year business existence. Today, the company dominates the markets in hard-to-reach and underserved communities in Canada. It also caters to customers in remote areas of Alaska, the South Pacific and the Caribbean.

Food sales represent nearly 75% of total revenue, while the remainder comes from general merchandise and related services. The company has a cargo airline which gives it a logistical advantage. The development and management of stores, as well as the strengthening of the supply chain, are constant concerns.

Since most of the annual income comes from essential or daily products, cash flow is more stable and resilient than ever. In terms of performance, the defensive consumer stock was up 9.36%. The current stock price is $ 34.39, while the dividend yield is 4.28%. North West’s payout ratio is less than 50%, so payments need to be secure and sustainable.

Mitigate the risks

The TSX could face strong waves in the fourth quarter. Canadians can mitigate risk and weather the approaching storm by owning smart stocks. Dividend aristocrats like CIBC and the North West Company will not disappoint investors. If you buy the assets now, you can hold onto them for good.


This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We are straight! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we post sometimes articles that may not conform to recommendations, rankings or other content.

Foolish contributor Christopher Liew has no position on any of the stocks mentioned. The Motley Fool recommends THE NORTH WEST COMPANY INC.


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