With the TSX reaching all-time highs, many investors may wonder if it’s still a good time to invest — specifically for long-term holds with a Registered Retirement Savings Plan (RRSP). Yet, there are stocks that offer both long-term stability and growth. And these are ones you can add at any time, even at all-time highs.
goeasy
First up, goeasy (TSX:GSY) is a financial services provider that has been growing steadily over the years. The company’s recent earnings report for the second quarter (Q2) of 2024 showed a 15.4% year-over-year increase in revenue, reaching $794.25 million. This growth is fuelled by goeasy stock’s strong position in consumer lending, particularly in subprime credit. With a forward price-to-earnings (P/E) ratio of just 8.34, goeasy stock is priced attractively for future growth. Its 17.7% quarterly earnings growth highlights its ability to maintain profitability, even in challenging economic conditions.
One of the key reasons to invest in goeasy stock in an RRSP is its consistent dividend growth. The company has a forward annual dividend yield of 2.77%, with a payout ratio of only 27.7%. This means the company has ample room to grow its dividend in the future. Given goeasy’s historical average dividend yield of 2.39% over the past five years, it’s clear the company prioritizes returning value to its shareholders.
When considering the future, goeasy stock is well-positioned to continue expanding its lending portfolio, especially as demand for alternative financial services grows. Its relatively low forward P/E ratio suggests room for capital appreciation, thus making it an excellent growth option within an RRSP. The company’s ability to innovate and tap into underserved credit markets makes it a compelling investment for those looking to balance growth with income.
Hydro One
Another top stock to consider is Hydro One (TSX:H). It offers a more conservative, stable investment option. As a utility provider, Hydro One has a lower risk profile, which is perfect for long-term investors seeking consistent returns in an RRSP. In Q2 2024, Hydro One reported $8.11 billion in revenue, a 9.4% increase from the previous year. The company’s profitability is supported by its near-monopoly in Ontario’s electricity distribution market, thereby giving it a stable revenue stream regardless of economic fluctuations.
From a dividend perspective, Hydro One stock has a forward annual dividend yield of 2.76%. Its payout ratio of 64.35% suggests the company is committed to maintaining its dividend. Even as it continues to invest in infrastructure upgrades. This makes Hydro One a safe bet for RRSP investors who want reliable passive income.
The offer of stability and safety is especially important when markets are at record highs. The company benefits from long-term regulatory frameworks that allow it to pass costs onto consumers, thereby ensuring steady cash flows. As Canada continues to transition toward greener energy, Hydro One stock is poised to benefit from increased investments in the electricity grid, further supporting its future growth prospects.
Bottom line
Both goeasy stock and Hydro One stock are excellent options for RRSP investors, even with the TSX at record levels. goeasy provides growth potential with its expanding financial services business and increasing dividends, while Hydro One offers a stable, lower-risk investment with reliable income. Together, each offers a balanced approach to long-term investing, thereby ensuring both capital appreciation and income for your retirement portfolio.