The Canadian Investor - 10 Canadian Stocks to Hold for the Next Decade

Episode Date: June 30, 2025

In this episode, we give 10 Canadian companies we believe are well-positioned to thrive over the next decade.  Tickers of stocks discussed: CSU.TO, L.TO, CP.TO, WSP.TO, IFC.TO, BN.TO, WCN.TO, DOL.TO, ATZ.TO, FNV.TO, SHOP.TO, WPM.TO, TFII.TO, CNQ.TO, TOU.TO, RY.TO, TIH.TO  Get your TSX Meetup tickets here! Get your Calgary Meetup Tickets here! Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense. See omnystudio.com/listener for privacy information.

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that it's a business. Just my reminder to people who own safe Google's, don't be surprised when there's a cycle. If there's uncertainty in the markets, there's going to be some great opportunities for investors. This has to be one of the biggest quarters I've seen from this company in quite some time. Welcome back to the Canadian Investor Podcast.

We are back for another episode. I'm here with Dan Kent. Dan, I think this will be a fun one. I'm not exactly sure when it will be released, so you'll see that now we're actually going to be recording some episodes in advance. The summer months are coming. We do try to get a little bit of time off like everyone else, but to make sure that we don't miss any content, we just record some episodes in advance. Typically some evergreen

episodes that will still be relevant a few weeks from now. So this one today, I think it'll be pretty fun. It'll be 10 Canadian stocks to hold for the next decade. So really the Canadian content and some really solid companies that I, like we both think should be doing quite well for the next 10 years. Some, we did five each. Some I think we're gonna have a little bit of a debate. So you can decide the listener

whether you agree with Dan or I, but I think it should be fun. Yeah, I went off the board on one of them. We'll see. Yeah. It'll be it'll be in it we've never done I don't think we've done an episode with me on the on the podcast for this so it should be pretty interesting. Yeah but before we get started just some quick housekeeping pretty sure this episode will be released before the Calgary event so it may be a day before not exactly sure on the timing but assuming that it is released before make sure that you go and register if you're

interested in coming like we had been saying recently we decided to make the event just free just make sure you register in the show notes on the event bright page so we'd like to see as many people as we can that you know listen to the podcast, want to meet us, want to talk about stock investing, macro, real estate. Dan Foch and Nick Hill will also be there so you can talk real estate with them and you can talk to Dan and I about more stock investing, a little bit of Bitcoin if you want me to chat about that too. It should be fun but make sure you don't miss it. Like we said we decided to make it free. Now let's start. I put you the first on the list here

and name that I know is very popular with a lot of listeners of the podcast. I'll let you get started. Yeah. So it would be Constellation Software. And I was going to say that it's probably a very popular stock among listeners. And I mean, it would probably be the most stable blue chip Canadian tech stock. I mean, you you could throw Shopify in there as well, I guess, to a certain degree. But I wouldn't I actually wouldn't call that a pure tech stock either. I mean, it's more involved on the retail side of things. But Constellation, for the most part, they acquire cash flowing,

smaller vertical market software companies, merge them into the fold. I would argue that it has one of the strongest management teams in the country. I mean, they've done this for a very long time and they've done it very well. They have a 10 year compound annual growth rate on free cash flow of 22%. So to give you an idea of how impressive this would be, Apple sits at around 8% over the same timeframe and Microsoft is at 13%. And kind of a buy and hold at this point in time is a continued bet that management will continue

to pull capital at high rates of return. Obviously the main bear case with this company is it simply runs out of high quality targets and they have mentioned this a few times that this is likely to be the case moving forward. This does make sense. Back in 2015, when they were generating 500 million in free cash flow, it's a lot easier to find numerous small deals and eat up that capital. But now, they're generating 3 billion plus, So it gets, you know, substantially harder. I mean, we've seen investors like Buffett say this. I mean,

larger amounts of money are harder to deploy at high rates of return. They had mentioned that, you know, that the 20% compound annual growth rates for Constellation are likely over, but it doesn't need to return that much to still be, you still be a solid long-term buy and hold. The business is certainly maturing, but it's one I'd definitely be confident in, even if they have to venture out of the vertical market software industry. And I own the company, and I have no intentions to sell. Yeah. Yeah, I mean, I think it's hard to disagree. I know when we touched on them not too long ago, we had some people that didn't agree

that there could be some potential headwinds with them. It's a very passionate shareholder base, might I say. And it's a company that I've been sitting on the sideline wishing I would have bought when Brayden started talking about it and wouldn't stop talking about it so I probably should have just listened to him and bought it. I said in time time again for me the only thing that would kind of prevent me from buying it would just be because at some point maybe they'll run out acquisitions to make that will move the needle plus AI could be a disruptor here down the line or it could just be a tailwind and just

make him actually even continue on this growth trajectory. But it's hard to argue with results and it's hard to argue that it won't continue for the foreseeable future. Yeah. And I mean, it's kind of hard to argue the headwinds as well because they state them themselves pretty much I mean they say the markets, you know High quality targets are getting more difficult as because they make less money on larger deals

I mean they mentioned this the smaller deals are definitely better and they do mention that they are Eventually going to have to venture outside of that market I mean if there's trust that one management team could probably navigate a outside market well, it would probably be this one. So yeah, it's, I mean, there's issues, but again, this is, you know, it's entering a more mature stage of the business cycle, but that doesn't necessarily mean returns are gonna be poor.

No, no, that's good. So now next one on the list, and we are going pretty quickly because there are 10 names in total. So it's not like we're doing a deep dive It's more of an overview of why we think they should perform pretty well in the next 10 years And we will have some honorable mentions at the end as well Just kind of rapid fire those at the end the next one here is Loblaws so I reference that on a previous episode that be, one of the grocers would be coming

and I decided to go ahead with Loblaws. It's Canada largest grocer and also owns one of the largest grocery chains, I would say in Canada. And sorry, not largest grocery chain, pharmacy chains. That's so I had my words a little bit confused. I do apologize for that. They compare favorably on most metrics to the other

grocers, so Metro and Empire. Metro, certain metrics slightly better. I think Margins Metro is just a tiny bit better, but they're definitely way before Empire on the Margins profile. I don't know if it's a result the fact that they're just better managed or it's the fact that they have some significant pharmacy businesses both of them so Obviously Metro with for those actually I say obviously but for those not familiar They have the Jean Couture brand and then Chopra's drug martyr Farma Pris on the Quebec side for Loblaws And it's not going to be the sexiest business business but it should do well in most type of environments

like we've seen so whether it's inflationary, whether we see the economy slowing down or recession. I mean at the end of the day, they pretty much sell essentials for the most part unless you go to Joe Fresh or something. But even then, you can make a case that Joe Fresh should do well because you know what? Their clothing is pretty affordable especially if you're looking at kids clothing.

Is Joe Fresh Walmart? No, it's their, it's a LaBla's brand. Oh, it's a LaBla brand. Yeah, yeah. So you know how they'll have clothing? So it's actually like pretty decent pricing. So I know because I bought recently bought a dress for my daughter and now for those I've talked about her a few times but she's not three yet and she really wanted to wear the dresses

so started wanting to just take off all her clothes to wear the dress. So we had to deal with a little bit of tantrum but I digress. Aside from that, Loblaws, they should be able to pass most of the increased costs related to inflation and tariffs, of course, to consumers. Obviously, it's not necessarily the best if you're a consumer, but at the end of the day, they've been saying the right things on calls that they're trying to mitigate these increases and I think they'll be very careful at you know making sure their margins don't increase just probably stay stable obviously for the optics that it would give if they'd increase their margins and then people are

struggling I think that is the one thing where it's probably more bearish for these kind of companies is they have to really be careful about the optics. Yeah. They're also much larger here than Metro and Empire, which should give them some leverage in terms of pricing power, especially if they can threaten to not, you know, get the products on their shelves anymore. We saw this happen with Folgers Coffee, where they just said, okay, well, your price increases too much so we're just not going to put it. That's a big dent. They would be a major grocer even if they were located in the US.

That's how big they are. Population growth should continue to be a tailwind for them and of course the other grocers and although population growth has slowed down recently, my bet would be that it will be picking back up in the next few years, likely not at the extent that happened The biggest drawback here for Loblaws in my opinion is that you just have to be careful on when you buy it. Like the valuation is definitely not cheap. I mean looking at a trailing 12 months valuation here you're looking at a 31 P.E. so even on a Ford basis yes it's like mid 20s. Price of free cash flow is still pretty high

in the higher teens, so it's something that I would start looking at, especially if you can get it in terms of the high teens for a trailing PE and a PE price of free cash flow, maybe around 10, 11, could really become very attractive. And of course, I'm talking about a trailing basis, but you can look at a trailing or forward as long as you just understand the differences

between both of them. I tend to like to look at the trailing and then factor in the potential growth forward and make my own assumptions regarding that. That's just my personal preference. If you look at the forward looking metrics, it usually will be based on what analysts are predicting. Yeah, I mean, Loblaw had a lot of pandemic tailwinds because they had their very discount heavy.

Like a lot of their chains are kind of discount operators. So obviously, when food inflation went through the roof, they noticed a... Well, they didn't notice, they realized a huge, huge surge in foot traffic going to those more discounted stores, which it's, as you mentioned, just crazy good performance for them over the next five years, or over the last five years, five, 10 years. And I would imagine just, you know, the high valuation might kind of be a sign that the market maybe thinks, you know, this shift will continue. Yeah, yeah, it could be.

I mean, it could. It's just, yeah, like it's really, it's hard to say the high valuation. It could also be increased investor demand for these kind of defensive stocks that will do the best in the all different kind of environment. So take that with, you know, I think you just have to be careful personally on when you buy it. If you buy it too high evaluation, it'll probably take you some time to, or it will take some time for Loblaws to actually grow into that. And I mean, not just Loblaws, any company, no matter how good it is. Want to buy a stock but don't want to shell out hundreds or even thousands for a single share?

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Considering ETFs like ZEQT, BMO's all equity ETF, or ZGRO, BMO's growth ETF. We'll move on to the next one again. We don't have that much time per name. This one is yours. It's a company we've talked a bit recently when we did our comparison. Yeah, so Canadian Pacific, Kansas City,

I guess Canadian Pacific, Kansas City now. So they're the only railway in North America that connects Canada, US and Mexico and that was due to that acquisition of Kansas City Southern. So despite the railways being a ancient business, I mean they've been around forever, they're definitely not a dying business. A massive chunk of freight is still shipped by rail as it's generally quite inefficient to ship by other means.

And prime example of this when Buffett acquired his railroad, he had mentioned that it was not an investment for the next 10, 20 years, but for the next 100. So he believes they'll be around for the next century at minimum. And I mean, their networks are virtually impossible to replicate. I mean, the cost of building out the infrastructure, it's companies do have the money, I guess, to do it, but it just wouldn't be feasible. I don't think you'd necessarily realize large returns from that

investment. So, I mean, I would argue that the railroads have the strongest moat out of any publicly traded company. And I mean, their valuations often represent that they very, very rarely trade at cheap valuations and it's probably because the business model is just impenetrable I guess you could say they have a 10-year compound annual growth rate on free cash flow per share of 10.5% this is well ahead of CN rail they're around 7.7% and I do believe the tailwinds are there for CP to outperform as much in the future just you know stronger capital allocation which you can go

back to our CP versus CN Rail podcast episode we go over that in depth they've just kind of been a better operator over the last while and I know a lot of people are down on the railways overall primarily because they haven't had the best returns over the last few years I mean it's pretty tough to invest in a boring railway stock when you know, tech stocks are hitting all time highs every single day. However, they are cyclical. They're the bellwethers of the economy for the most part. I mean, you could look to probably Canadian banks and railroads to kind of judge the strength of the economy. So they're going to perform better

during economic booms than they would economic slumps. But one could also argue that the best time to accumulate these companies is when there isn't much interest in them and they're not operating all that well because it's pretty hard to see a situation where when the economy picks back up again, that freight volume won't pick up again. And the one thing about the railways is they're becoming

much more efficient now. So that's kind of an added tailwind when, you know, economic activity picks back up, that they should be able to post strong profits. And I mean, like the prime reason for one of these to be a stronghold for the next decade is I just can't see anything interrupting the business. The moat is just too wide.

Again, this is not, it's not unknown. Everybody knows this, which is why you will pay a premium for these companies. But yeah, the railways will will be around for for a very long time. Yeah, exactly. So I don't have too much to add to that, because I agree with that. I think the railways should continue to do well, even Canadian National Rail, despite continue to do well even Canadian National Rail despite me being pretty critical of their management But they are not on this list. We did Well, you decided to add CPKC and I think that's a great pick for the next 10 years Next on the list. It's a company that I don't own again, just like here Lobwos, it's also a company that I wasn't owning and I do apologize for

adjoining TCI listeners. I was, I think a bit asleep at the switch. I should have put the stats for CPKC when you were talking about it, but thankfully we did a deep dive not too long ago. So you can always go back to that episode. Now WSP GoBolt, I don't own it like I mentioned. We did the earnings for them recently and I gave a bit more of an overview, so feel free to go back to that a couple episodes ago. The bullish case here is that governments and the private sector keep spending on large infrastructure projects.

It's something that I think will continue into the foreseeable future. And I'm not the only one that really thinks that because there's this really interesting forecast called the infrastructure outlook. So what they do is they're forecasting in terms of what they believe their forecast will be for global spend on infrastructure, not for the next 10 years, but by 2040. And you're looking here at massive amounts. So they forecast about 79 trillion investment

in current trends that will be spent up until 2040. They say it's 94 trillion in total investment needed and then there's a gap of 15 trillion So the current trend is there's gonna be 79 trillion, but they believe it's 94 trillion that will be needed So that's the gap of 15 and that's in u.s. Dollars and obviously estimates our estimates So take that with a grain of salt because estimates I mean could end up being half of that could end up being more It's hard to say and I know we throw we throw these like the T word quite a bit. Uh, but it's a lot of money, even if you factor in inflation, it's a lot of money. And obviously if this trend continues, I think they WSP global will be very

positioned to benefit from that spend because they're really a global provider in consulting and engineering services. So it's something that a lot of these large scale projects and they have a hand in, you know, power, energy, large construction projects, environmental assessments and so on. So they should do quite well in this type of environment. And even if they slow from an acquisition perspective, because in the past this has been definitely a play on not only organic growth, but also grow by acquisition. Even if the acquisition part slows,

you can make a case that there's gonna be a lot of opportunities for organic growth. And I think it should do well in any kind of economic environment, because you're seeing more and more kind of a bipolar world. So kind of almost like trade alliances or trade blocks or allies kind of grouping in together. We're seeing less globalization. So I think you're going to see more and more countries investing in their domestic economy, in the infrastructure for that.

You're gonna see some more and more spend on AI, electrical grid expanding to be able to meet those needs and I think WSP is really well positioned to benefit from that in the future. And even if there's a recession, a global recession, what do governments do when there's a global recession? They pump out the money printer and they, well, they actually not in that order, they'll spend massively, which then forces the central banks to bring out the money printer and monetize those deficit. So I think they'll do well regardless of that. The, my main issue that has always been there for WSP Global is that they trade at a pretty premium valuation.

If it can get into the kind of trailing PE in the 30s and a trailing price of free cash flow in the high teens while keeping this kind of growth, I think it would really become an attractive play because of the big tailwinds that I mentioned. So that's the reason why I added it on the list. Yeah, they are trading at a pretty, well, not a large premium, but they're trading at a premium, but they've done quite well. And I own WSP and one of the, like I do like the public and private sector mix because like you said, when the economy gets poor, you might see that private sector slow down, but you also have, you know, governments ramping up, you know, infrastructure investments to kind of stimulate the economy. So it kind of shelters it to a certain degree in, you know, a lot of environments and it's,

I mean, it's an industry leader. It's one of the more efficient. I mean, we don't have a ton of engineering publicly traded engineering companies here. I think the other one was Stantec is one. Yeah, but then they had Boral whatever SNC, Lavelaine, whatever they became. Atkins Realist. Yeah, real. Yeah, that's good. You got the name. I was like, yeah, because I looked at them when I was doing this.

I'm like, oh, what's the name again? And I I remember they got rebranded. And I was like, oh, if people are really down on the name, it could be a decent play as a value play. Well, I think I'm a year or two late on that, but I think it would have been a good value play if you really bought into at the max pessimism of the company. Because now people don't really talk about SNC, Lavalin and all the scandals anymore right? It's kind of been sure it's part of their history but it's been a bit forgotten. Well especially when you rebrand it I guess. Yeah I mean they yeah. It takes time but yeah. Well and that's the one thing like it's uh you know with these companies

like what were they doing? They were, they were bribing people. Yeah, bribing officials, I think, in Africa for certain infrastructure projects. I think that was one of the big things. I don't remember the country. I'm pretty sure it was somewhere in Africa. And that came out, I think it may have been the Gaddafi regime back then, like 10, 15 years ago.

But yeah, anyways, not great practices, but could have been a play, you know, probably some years back, but no, that's it for it. We'll move on to the next one, trying to get us on pace so we don't go too long for this episode. So Intac Financial would be the next one. It's one I own as well. So they're a property and casualty insurer,

so tons of brands. It's very likely own as well. So they're a property and casualty insurer. So tons of brands It's very likely that you probably deal with one of in tax brands. Even if you don't know it I mean they own Bel Air Direct. You do? Which one? Bel Air. Yeah. Yeah, so Bel Air Direct. They were by far the best price we could get. Yeah So when we switch and which is quick tip if you want to save money You know check when your insurance is about to renew. I think it's usually like the month before whatever Start comparing because insurance premiums will tend to go up obviously from year to year But if you're willing to switch and take the time to do it

It'll probably take you a few hours you can save a decent amount of money So that's the only plug I wanted to say. I'm not saying with them specifically, I'm just saying, you know, whoever you are, you're with, look at other insurers because I mean, at the end of the day, it's money. If you're getting the same kind of coverage like, and why not switch, right? You can save several hundred dollars, if not more a year if you switch. Well yeah and it's a good that's a good segue into the fact that so Intact is one of the largest PNC insurers in North America but the company only has around 16 percent of the market share so it is a very heavily fragmented industry which again I mean which is why you know shopping around

for insurance can end up saving you quite a bit of money. But on that case, it also allows the company to continue to grow both organically and through acquisition. So over the years, the company has laid out, I mean, billions of dollars in terms of acquisitions in the market. I won't go over them just because we're trying to be, you know, a bit quicker here, but they do spend quite a bit to acquire companies. And I mean, ultimately, insurance companies, they bull down to the underwriting And I mean, ultimately insurance companies, they bowl down to the underwriting. The better the underwriters,

the more profits the company is gonna generate. Intact has one of the leading combined ratios in North America, which effectively showcases underwriting ability. So the simplest form, the combined ratio is pretty much the premiums collected versus the claims paid. So if the company pays out 90 cents in claims

versus every dollar it collects in premiums, its combined ratio would be 90%. So obviously the lower number, the better. And it doesn't look that good on the surface, you know, 90% towards claims. But again, this is one of the industry leading ratios. And you know, consistently rising automobile and home prices, they just continue to be a tailwind

for the company because I mean, insurance costs are just continually heading upwards. for the most part people are Forced to pay them. I mean the fines for not having auto insurance in Canada are gigantic home insurance. I Have to actually confirm my home insurance is valid with my lender every single year So I mean that's it's pretty much a requirement to have and in addition to this I mean if you look to the developments in artificial intelligence moving forward, it will likely have the company improving the scale and efficiency of the underwriting. I don't really think we're at a 100% AI driven underwriting system, but I would not doubt we see AI assisted very soon. And probably, you know,

in the next decade, I wouldn't be surprised if the underwriting is all artificial intelligence removes any sort of human error to a certain degree which ultimately should help. Company has a 10-year compound annual growth rate on cash free cash flow of 9% and if it wasn't for some large-scale catastrophe losses over the last few years this this would be in the double digits like mid double digits. I mean catastrophe losses I think are are something you can expect in the future I mean but the insurers largely offset these with cost increases. I mean, catastrophe losses I think are something you can expect in the future. I mean, but the insurers largely offset these with cost increases. I mean, I'm sure everybody's feeling that insurance rates are sky high, but I used to own a manual life as a life insured, life insurer. And I just, I kind of felt I liked the PNC segment a little bit better, more profitable, faster

growing. So I did end up making that swap. I've owned Intax since 2020, I believe. Yeah, no, it's been an amazing performer. I just look at the chart, I'm reminded of how well it has done. So done very well for an insurer, that's for sure. Don't have too much to add here. don't know insurers all that well I think I've talked about that multiple times on the podcast so not gonna add stuff when there's no value to be added. Want to buy a stock but don't want to shell out hundreds or even thousands for a single share? With Questrade's new fractional shares, you can invest any dollar amount and build a diversified portfolio instantly.

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Summer always gets extra busy. Weekends at the lake, trips out to Canada's east coast, vacations with the family, chasing a bit of sunshine somewhere new. Every time I'm away, and probably you as well, your place just sits at home empty. And since I'm already staying at a great Airbnb, why it made me nervous to think about the work required. It's easier now with Airbnb's co-host network. I can find a local trusted co-host to handle all of it. Guest check-ins, support, even cleaning, no stress, no extra work. If your place is often empty in the summer, maybe it's time to let it make some income for you. Find a co-host at Airbnb.com. No stress, no extra work. If your place is often empty in the summer, maybe it's time to let it make some income

for you. Find a co-host at airbnb.ca forward slash host. Do you keep hearing about these all-in-one ETFs lately? Well I have some exciting news. BMO ETFs just cut the fees on their flagship all-in-one ETFs to 0.15%, making them one of the lowest cost options in Canada. That's right, more value, same smart diversification, all in a single ETF. Whether you're just starting out or simplifying your portfolio, BMO all-in-one ETFs make it

easy to invest with confidence. Just Zed it and forget it considering ETFs like Zed EQT, BMO's all equity ETF or Zed GRO, BMO's growth ETF. So we'll go on to the next one here a very popular Canadian name. I think we'll have a lot of listeners happy that we are talking about this one. I'm assuming you probably would have added it too, but Brookfield Corporation. So Brookfield, just like WSP Global, should do well in the next decade for a lot of similar reason. It owns infrastructure and power assets that will perform well in most types of environment. They should do well in the next decade as demand for those assets increases, especially

on the infrastructure and power side. They also own a portfolio of high quality real estate asset, although I'm a bit less bullish on that part of their portfolio for the next 10 years. It's more like despite of that, but we'll see. Real estate could definitely turn around. And of course they also have a major private credit and private equity line of their business, which should continue to do well provided that it is managed properly in the next 10 years, because I think there are also some risk in that area,

and there are no major economic shock. But again, I think their management is astute enough to be able to navigate that pretty well, especially with Oak Tree Capital being part of the the Brookfield family and Howard Marks. Yeah, Howard Marks. I always confuse him with Howard Schultz. So with our Marks still I think advising there being part of the business. I think it's pretty reassuring since he did a killing during the great financial crisis. And along with all of those, they also have exposure to the reinsurance business and annuity business. So, and reinsurance is basically essentially buying, like essentially ensuring what insurance

companies are insuring. So that's why it's called reinsurance. And the annuity business, it's mostly, it's not really all that much annuities for individuals and things like that so and for people not familiar with annuities and you it ease is typically when you have an insurance company and You'll go to the insurance company. You'll give it a lump sum of money and you'll be like, okay What kind of payments can you give me over the next period, 10, 15, 20 years or until I pass away in exchange for that lump sum. So that's usually an annuity.

But what they'll do is they'll actually, for example, you'll get a pension plan, defined benefit. So the way the defined benefit pension plans will work is they'll guarantee their pensioner a certain amount for the rest of their life. It may be indexed, it may be partially indexed and whatnot. But what can happen is in cases where let's say they're closing that pension plan, so they're no longer putting new members in the pension plan. So slowly there's less and less members, but they still have to pay those promises.

What they can do is actually offset the liability of those commitment to a company like Brookfield. So they'll say, okay, we need to, we have this much money left in the pension plan, we have to honor our obligations. So then in exchange for that money, Brookfield will essentially make sure that those payments are fulfilled. So it's essentially taking off the liabilities from a pension plan. It could be for various reasons, could be that they're changing to more defined contribution pension plan where it's just like employer matching, but that is part of the business as well. And of course, you'll really

have to trust that Brookfield will be able to properly manage and price that risk when it comes to reinsurance, but also the annuity business. They've been a big benefactor from globalization. Obviously, Mark Carney was part of the board for a while here. We'll have to see if they can benefit from de-globalization because I think at this point, it's very hard to argue that we're not in the middle of de-globalization, but given the experience of their management team and what they've proven in the past, I think it's a safe bet to say that they should be able to navigate that pretty well in the next 10 years. Yeah, I mean, Brookfield is a company with a lot

of moving parts, I guess. It's very confusing for a lot of people. It's even like, I know the company decently well, but it's even confusing for me. I mean, if you think about all the subsidiaries and all of the insurance operations and stuff like this, but it has performed very well over the last while. It's one I own as well, I believe.

Yeah, I bought it post-spinoff and then I've held it ever since. Like after they spun out the asset management business, again, another subsidiary. I mean, it's a complex business to understand, but I mean, if you do some digging, they've done very well over the last while. The corporate structure is definitely hard to understand.

Yeah, and I think it confuses a lot of people to the point where they might opt out of owning it, which I mean, is completely fair. If you don't understand it, you probably shouldn't own it. But yeah, very, very strong performer. Yeah, exactly. Now to the next name on your on the list are shared lists. Yeah, collecting trash. So waste connections. They're a Canadian traded company, but I'm in the bulk of the operations are in the United States. I believe it's like north of 75%. The waste management industry kind of like intact,

it's very fragmented. So Waste Connections routinely spends hundreds of millions of dollars a year on kind of smaller tuck in acquisitions. In 2024, the company actually acquired companies that attribute around 750 million in revenue. Uh, I don't know if we, and yeah, they're talking, you know, 9.0, 9.1 billion dollars in trailing 12 month revenue. So their acquisition strategy, you know, it contributes quite a bit to the operations.

I mean, operating margins in waste connect in waste disposal businesses are quite high. I mean, they're not tech style, but you, but waste connections routinely is in that 20% range. And it does have a lot of exposure to cyclical areas like oil and gas, let's say disposal, which depending on the price of oil, the activity in there will fluctuate, but the business is exposed to a lot of operations that will continue to grow no matter how strong

or poor the economy is. I mean, it doesn't matter if you just got a promotion or you've been laid off every garbage day. You're going out there putting your trash on the side of the road and they're coming to collect it. Ultimately, they're just paid by the or contracted by the municipalities to pick that trash and recycling up. Compound annual growth rate of 11% on free cash flow per share over the last 10 years and it's kind of accelerated recently which many would kind of find surprising because of the economic slowdown but the thing here is Waste Connections has more than offset declines in volume. Like there's no doubt it's seen declines in overall volume of disposal of recycling things like, but they've been able to

offset it with higher pricing. Volumes over the last year have declined by 2.9%. That's at the end of 2024, but total pricing growth was 6.6%. This highlights the pricing power the company has due to the moat. There are a lot of waste disposal companies, but there's very few large scale ones. And oftentimes the smaller ones will just get kind of gobbled up by the major players. I mean, we even, I could even say that in the town that I live in, it used to be a privately owned garbage disposal company and waste management just came in and bought them, took it over and now they operate it. So like you said, with like quite a few companies we've actually talked about though,

it often trades at very high valuations. So a typical price to free cash flow multiple for this company would be around 35x. However, I don't really fuss too much on that side of things. I mean, if the market is typically paid 35x for waste connections over the last 10 or 15 years, it's pretty safe to say this is probably the range it's going to trade at moving forward. And it's been a very strong performer over the last while and it's a business that should be relatively unfazed regardless of the overall economy. Yeah, yeah, hard to argue. I mean it's a necessity. It's essential. So you've got a couple big players, I think them, Waste Management are the two big players and GFL, I guess, in Canada too.

Yeah, GFL would be, I'm pretty sure they're on the smaller side. And I think GFL is a lot more, I guess you could say like infrastructure based. I don't know if they do too much, you know, let's say residential garbage disposal or recycling But I'm not I've seen them around in Ottawa. Yeah, I think it may really Commercial not really residential at least what I've seen in Ottawa. So yeah, I definitely have seen them around Yeah, and I think there was like a few years ago I think GFL was actually an acquisition target by I can't remember if it was Waste Connections or Waste Management I'm pretty sure one of them was looking to buy it it didn't go through but yeah it's a it's a very profitable industry and it's one that

doesn't usually show many signs of slowing down. Okay well I'll move on to the next one here Dalarama so a retail plays, that's the second one here. We've talked about them quite a bit. We try to go over them every time they report their earnings. I think it does help us because it's usually when it's a bit more quiet in the earnings season. They should do well in the next decade to come. I think as more and more people look for value,

I think that's gonna continue. What's really interesting about them is they do cater to a pretty wide-ranging demographic. I think they obviously will cater more for those who have less disposable income and may not need large quantities like a Costco or have the means to get to a Costco. So they have located I mean I'm just trying to think about Ottawa but it's all over the city so a lot of cases you can just walk to it but it also caters to people that are more affluent that may just be looking for a small thing and during the area and just make sense to go there so I think they do have a pretty wide target

demographic to be honest they also doubled their sur count in the last 10 years, and of course that might slow a bit in Canada. Over the next 10 years, they also have a controlling stake in Dollar City that operates in Central and South America, so there's been some good growth there. Their Dollar City stake gives them the opportunity to keep growing even when they might reach a bit of saturation in Canada, but again, you still see these independent dollar stores a little bit in Canada here and there

so there's probably still some opportunities to Expand and grow by acquisition even in the next ten years and they've really executed well So well that their free cash flow per share is essentially been a lineup into the right So that factors in share dilution too. So it's been very impressive It's also impressive the margins that they have for a dollar store Especially when you start comparing them to their US peers like it's not even close you look at the operating margins. I think they're around like 25% Operating margins here.

Yeah, there you go. I have it in front of me around 25%. And you have like dollar general dollar tree that are in the single digits or low double digits. So it's really impressive what they've done, but that might be also a word of caution is that when there's really good margins like that, you also open yourself to more competition, because potential competitors do see that. And I'm not saying it's going to happen, but it is something that I would definitely keep in the back of my mind, because I don't know how

sustainable these margins are, especially if you start seeing Canada putting tariffs on other countries as eventually maybe to appease the US or as part of the trade deal with the US. How will that impact their margins? Will they be able to kind of keep catering to that lower value audience? They've shown that even with higher prices,

they are able to because it's still much more affordable than all the other alternatives. So they'll probably be able in the next 10 years, my assumption would be that yes. I guess the biggest drawdown for them or the biggest issue that I don't own them right now is again the valuation. I mean this thing is trading at for a retailer to be trading at like a 40p like I don't have Costco in front of me but that's a kind of P that Costco trades at. So it is a premium obviously you're going you're betting on a business that has performed very well

and deserves a premium. Does it deserve this high of a premium? That's probably my question. But again, I think the business itself should be doing, should do quite well in the next 10 years. Yeah, I think that's probably what a lot of people are asking because they're only supposed to grow 3 to 4%, I think, comparable sales, which is pretty impressive because the previous year they were like double digits almost, I think. But yeah, I mean the valuation is always a concern, but I think we've mentioned it on nearly every one of these companies.

So I mean, it's just kind of an indication that good companies trade at high valuations. I mean, as you mentioned, the US counterparts, I think Dollarama generates like 40% of the revenue of Dollar Tree, but they have the same free cash flow generation, which just kind of shows you that would make sense based on how strong dollarama really is. I mean, they've had a lot of like, I think if you just kind of completely eliminate the pandemic and like the food and the inflationary period, I don't think it would be sitting where it is, but

it's benefited substantially from that. Yeah. Now we'll move on to another retailer, one that's... The controversial one. The controversial one. Yeah. So I'll let you start and I'll probably push back a little bit on that, but that's okay. Some fun open-minded debates.

Yes. Yeah, I was thinking like, do I wanna just put five blue chip Canadian stocks or do I wanna kinda mention a company that I definitely will be buying and holding for 10 years in case, unless something changes, but that would be so Aritzia. This one I will say is more a bit on the speculative side

and certainly has much higher risk reward than any of the ones we'll talk about on this list by probably quite a wide margin. However, I am quite bullish. The company is a mid-tier fashion company, so it's not as impacted as a high-level fashion company when times get rough. It doesn't sell particularly expensive clothing but it's not cheap either you're talking you know that couple hundred dollar range I would say for some items but it can get pretty pricey as well but they started out as a Canadian retailer but they've now pretty much shifted all its focus into aggressive US expansion so a prime

example of this in 2019 they had 67 Canadian boutiques and 22 US boutiques. Today they have 67, the exact same amount of Canadian boutiques and they've pretty much tripled their US exposure, 63 in the United States. Over that same time frame, their Canadian revenue has gone up by around 90% while their US revenue is increased by just under 500%. And fashion retailers are extremely fickle, but you know, if a brand gains traction, it can really go on a monumental run. I mean, a prime example would be Lululemon's run from 2014 up until the start of 2024. It had a 10 year compound annual growth rate of just under 20%. They have no debt. They generated around 200

million in free cash flow over the last 12 months. They're pretty much spending the vast majority of this to continue to expand into the US market, generally an untapped market despite the surge in growth. So over the last 12 months, Lululemon generated around 6.6 billion in revenue from the US. Aritzia is currently at about 25% of that. I'm not saying it's like the next Lululemon in terms of popularity. They're very different products, very different companies. But I mean, with these retailers, if the brand sticks,

if the expansion is done well, I mean, there's definitely the potential for some pretty big returns. For me, I mean, their operations out to the border are kind of only confirming my thesis. I've owned a Ritzia for it's got to be close to five years now. And but again, like with these types of companies, you have to keep a very close eye on them because the thesis can can change very quickly. It you know, it's been one of the best performing

Canadian stocks over the last while here. And it should continue to be if if the momentum continues south of the border. Yeah, I guess where I'm like, it's hard to disagree what they've done recently, and they've executed pretty well aside from a few little snafus during the pandemic with inventory levels, where I have a harder time is betting on any. Fashion, yeah fashion clothing company for like a 10 year period. I could be more on board for five years, but 10 years is where it gets pretty hard for me just because fashion can change so quickly.

I mean like mullets are in. You know five years ago I don't recall seeing a lot of people with mullets are in. Like, you know, five years ago I don't recall seeing a lot of people with mullets and now they're all over the place. Fashion, it's just an example. I know it's obviously not clothing. I was going to say, you don't live in Alberta. I've seen a lot of mullets over the years. Oh yeah. Well, I mean, they were still, they were, uh, you know a thing but um, and it's not because i'm uh jealous or anything that I don't have a lot of hair If for those who are younger just google al eofredi mullet

From the 1990s. He had nothing on top. There was a lot of balding on top. You're gonna look it up, aren't you? Yeah, yeah And um, there was let's just say was very long in that oh yeah that's probably what I look like yeah it's oh that's ugly oh yeah it's I you did good you did good yeah it's I'll show I'm trying to get a picture here for for a joint TCI listeners but I can't really find a good quality one. But you can Google it, Ali Ifridi in the 1990s, he essentially had no hair on top and really long in the back.

So that's probably what I'd look like too. But anyways, aside from the sidetrack of the mullet talk, it just goes to show though, that stuff in fashion comes and goes very quickly. And I think that's where Lululemon has struggled a little bit recently where they had to revamp. And I guess you have to bet on them that they're able to adapt pretty well.

But that's where I, anything beyond five years, I really have trouble with a fashion company. That's more the reason, really on a Ritzia itself It's more just a fashion industry in general Yeah, I mean you could argue the the other nine will talk about our are to a certain degree just set and forgets whereas Yeah, a company like a Ritzia would would not be a set and forget But I do believe the runway is there. I mean, obviously it's a lot smaller than a company like Lululemon I think they're only seven billion dollar market cap so they definitely do have the runway there and you know I again

probably the highest risk highest reward potential out of any of these companies on this list but oh there it is yeah yeah no exactly you're probably right for that and then for our joint TCI listeners, you can enjoy the beautiful mullet and probably have a mental picture of what Dan and I would look like if we try to grow a mullet right now. I don't even want to. I've been bald for so long. It might look like that. But yeah, no, it would probably be that. But for those who stayed with us, we still have one name left. And the last name here is Franco Nevada. Probably won't be surprised.

It is a name I own. And a lot of these names I actually don't own, which is kind of interesting. But definitely names I do have on my list. And again, the biggest thing for me for a lot of them is just evaluation. To me, honestly, Franco Nevada, again, valuation is a definitely higher compared to like mining companies, gonna be way higher, but you're getting a whole lot more quality in my opinion. And to me, it's like honestly a no brainer. Obviously, this is not investment advice, so do your own research. But I would also put Wheaton Precious Metal in this

category. They're also a metal streamer. But I just know Franco Nevada better. So that's why I added that one. But I think you can't go wrong with just doing kind of equal weighting Franco Nevada Wheaton if you wanted to do that, if you wanted to even diversify even more in terms of the bets they're taking. And the business model is just fantastic. They provide financing in exchange for future gold productions at a fixed price or in some cases a royalty. They end up making tons of bets all around the world on mining projects so when it pays off it usually pays off pretty big. Some won't pay off and they'll also invest in established project by very well established mining

companies so they'll offer usually they'll do royalty deals in those instances so they'll give some upfront money for a percentage of the revenue or the whatever the the royalty has agreed to from that mine the fact that they do a lot of bets I think it's really important because it reduces operational risk political risk and concentration risk that you see in a lot of mining companies although the major I think it's really important because it reduces operational risk, political risk and concentration risk that you see in a lot of mining companies. Although the major mining players, they'll typically have mines kind of spread out over the world to keep.

So I will give it that. But again, they're the ones that they have operational risk, those miner though. So you know, increased costs, they'll be hit by that. Costs of labor, costs of oil, whatever they require. Weather, exactly. Like they have all these operational risks that a company like Franco of Nevada doesn't really have. Gold should do well. Obviously they do more than gold, but they primarily get gold. I think it's like three quarters, if I remember correctly, something like that. Yeah, I think it's quite a bit.

Yeah, I think it is the majority. I don't have it on top of my head, but gold should do well. And when I say gold, you can say precious metals. That's fine. And encompasses like silver, like platinum, some other precious metals too. But it should do well if government keeps spending beyond their means.

And to me that will likely continue and that will most likely for central banks to expand the money supply which should Ensure that the price of gold will keep increasing over the next 10 years The demand for gold by central banks is likely to increase as more and more of them want to diversify away from US Treasuries in the next decade. I'm not saying that they're going to sell all their US Treasuries, but as they try to diversify away from that, it could be for political reason, it could be that they're not trusting the US to honor them in the face of what has happened in Russia. And the thing about central banks

too, if they're deciding that they're diversifying away from US treasuries and more into gold, if they've made that decision, the price will not really impact them. They're really price insensitive buyers when you think about it. Because if they made that decision, sure, if there's a big drawdown, they may buy a bit more. But for the most part, if their strategy is to get to a certain percent they will get to that percentage and they're not really sensitive on the price and if for a price of gold and precious metal just keeps going up a big portion of it just goes to the bottom line for a company like Franco Nevada it's really interesting because it's an interesting play if you want exposures

to the precious metal but you don't want to hold the metal itself because it does generate some income. It's not a big dividend. Typically pays around 1%. I think it's 0.9 right now. So it's not a huge dividend. But again, you do get some income. If you're someone that doesn't want to hold gold as an asset, that's fine. But I think owning a company like Franco Nevada makes a whole lot of sense they're really well managed and they have a proven track record and the it's really I'd like a better word it's just really really good business model yeah and I mean their yield is relic like they do grow the dividend almost every year but I mean their yield is is pretty low because you know since the financial crisis They're up around 1500 percent

If you had reinvested the dividends, and I mean they have no debt No debt, and I mean you can just see like the flexibility they have I think this was it would have been in late May they Spent I believe it was 1.1 billion dollars acquiring a royalty from a mine in Ontario I believe it was $1.1 billion acquiring a royalty from a mine in Ontario. So it's likely that gold exposure goes up because I think that's a 100% gold mine. But again, you're in, you know, they had some difficulties with the, the Cobra Panama one. I doubt they'll have difficulties in Canada. I mean, the regulatory environment here is a lot better. Obviously, you know, the Cobra Panama situation

is something that could happen again, and it just so happened to be their their like biggest generator as well. But it's I own Franco I, I used to own, well Kirkland Lake, and then it became Agnico and I don't know owning miners, just like owning oil and gas producers. I mean the streamers are just Easier businesses to own in my opinion and it's one like they tend to perform better than most miners But yeah, if you're really into miners and you do your research you might be able to handpick The few that will do better, but there's not that many when I was looking, I think Agnico is the only one that has performed better than Franco Nevada. Well, the thing is, if you're looking for stocks to buy and hold for a decade, I mean, producers are definitely like you pretty much have to time the top and the bottom just because of the cyclicality of, you know, the prices and stuff.

I mean, the gold producers very rarely and even oil and gas producers, a lot of them, I mean, they just have such harsh pricing sensitivity due to the commodities. They generally are not the best set and forgets. They're more timing the cycles, things like that. Whereas a streamer, I mean, you just buy it, hold it. Yeah, no, exactly. The streamers, I mean, you just buy it, hold it. Yeah, no, exactly.

The streamers, I think, is just a great business model. And of course, what we saw with the Cobre Panama Mine, I think it's, I think it just reinforces the case for streamers. Yes, it ended up being like a really important my like project for them. It was a big part of what they generated, but they were still able to be resilient. So if they're able to be resilient on that one project that

is like a big contributor, like one of their biggest, if not the biggest, and still be able to take that punch but continue and do quite well, I think it just shows how resilient they are and how good that business model is. And like I said, if you wanna make sure you're spread out across even more projects, you just do kind of equal weighted Franco-Nevada and Wheaton precious metal and then you have even more exposure to more projects.

And that's why it's so important because you're seeing a lot of populism, political unrest around the world, governments changing. That's what we're seeing a whole lot right now. And there's always a risk for these mining companies where you get a government that's more nationalist and they're like, you know what, we're taking over this mine. And that's a non-zero risk. But when you have your bets spread out enough you minimize that risk. It's not gone but you minimize it. Well especially in a country like Canada as well it's a lot less likely but yeah in terms of like producer versus streamer I mean when that mine got shut down first quantum which owned the mine it fell 73% whereas Franco fell about 20% which makes sense because I believe it was about 20% of Franco

Nevada's EBITDA so you can just see the volatility there's 70 some percent versus 22 so yeah yeah and obviously we've talked about them and not to uh you know kind of reassure beat a dead horse or whatever the saying is sorry I'm probably butching it beat a dead horse yeah, beat a dead horse or whatever the saying is, or I'm probably butching it. Beat a dead horse, yeah. Yeah, beat a dead horse. This is despite, like, there's a non-zero chance that the Cobre Panama mine reopens too. But they've essentially written it off.

So that's essentially, that's like a bonus, which could be, I'm not factoring that in my investment thesis, and I don't think they are even as a company, but that could be even if there's like, I think it might be realistic to say there's probably like at least a 5% chance. Yeah.

So even that 5% chance is not nothing. It's not dead. No, exactly. So it's just something to keep in mind. I think they've did the prudent thing to not put their hopes up too high on that, but there has been some development between First Quantum. I think it is the company, right? Yeah. Yeah. Okay. Well, that kind of wraps it up. We did have a few honorable

mentions. We'll just kind of like, there's just a couple here that we had each. There's probably more that, you know, as we think about it even more we'd come up, but for me it would be Shopify, obviously the behemoth that Shopify has become in terms of e-commerce and everything that they offer. Wheaton, Precious Metal, like I talked about. Even, I didn't have it written down, but one that comes to mind quickly would be TFII.

So TFII International, although it's very cyclical, but their management team has definitely shown quite a bit in terms of managing the cycles, but that one would be a bit more cyclical. And I'd even add Canadian national rel as much as I, I've been harsh on the management. I think the bullish case for the next 10 years is the management team can't get worse than what it is now. But for you, you had a couple of

names on honorable mentions. Yeah, so I had Royal Bank, which is probably a pretty obvious one. Largest bank in the country, most, you know, largest exposure to the Canadian economy, but also the largest exposure outside of Canada. I think they operate in 40 countries. And then I had Torremont, which is an equipment provider effectively. And they do have some refrigeration as well. They're a business that again is going to be cyclical, but generally they've, they've

navigated the environment quite well. I think they've, I think they've raised the dividend for 35 straight years, which I'm not really one that focuses too much on dividend growth, but it is very difficult for companies to maintain that level of dividend growth. I mean, you're talking about pretty much when I was born, they've been raising the dividends. So they're an interesting one.

If you want to look into it, it's one I own as well. Yeah, no, those are great name. And a couple of them that came up as we were just talking, Canadian Natural Resources. If you're bullish on oil and gas in the next 10 years, they've definitely been one of the top names in Canada when it comes to that. Termaline, more of a natural gas play, another really good play if you're bullish on that in the next 10 years. So I think we probably could have made a list of 20, but we left it at then. So I think it was a fun episode.

Just do a higher level of each company, not in too much depth. Let us know if you like these kind of lists. Maybe we can do some more. I know we had a lot of feedback about like the CPE comparing to Canadian National Rail. So we'll look to do a few more of those as we mentioned earlier, is that we'll be recording some episodes in advance because we are trying to take some time off a little bit. So I think those episodes will likely be one or two of the comparing two companies. So whether it's two Canadian companies or one Canadian, one American or one Canadian and somewhere else, we'll be doing some more of that. So you'll be

hearing some of those in the next couple weeks. But on that note, before I start rambling too much, thank you everyone for listening. We do appreciate the support that we get. Really appreciate it. Constructive feedback is always welcome as well. You know, we try to do our best in terms of content for the show, but if The Canadian Investor podcast should not be construed as investment or financial advice. The hosts and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.