2 Top Canadian Infrastructure Stocks for Long-Term Investors

Daniel Da Costa
·3 min read
Silhouette of businessman sit on chair and hold a cigar and looking at the city in night.
Silhouette of businessman sit on chair and hold a cigar and looking at the city in night.

When looking for new stocks to buy, investors often focus the most on the Canadian stocks that are consistently in the news. These happen to be exciting, high-growth companies like tech stocks. Other times, it’s distressed value stocks like Air Canada.

These stocks can be great investments, but they aren’t the only stocks you’re going to own. And often, some of the least-discussed, least-exciting companies are the ones that offer the best potential long term.

The key is finding businesses that have robust operations and will grow consistently for years. That’s why finding infrastructure stocks with attractive assets can be such great long-term investments.

Infrastructure businesses are great, because the operations are a staple of the economy, and therefore much of the company’s cash flows will be robust.

Whether it’s a Canadian telecom stock with communications infrastructure or pipeline companies transporting oil, infrastructure is key to our economy. And often, these industries have high barriers to entry. So, the companies owning these assets will enjoy strong competitive advantages.

So, when you can find high-quality companies with management teams that can consistently grow shareholder value, they are the perfect stocks to buy and hold for years.

Here are two of the top Canadian infrastructure stocks to buy today.

A top Canadian gas stock

One of the best long-term Canadian stocks you can buy today is AltaGas (TSX:ALA). AltaGas is an attractive midstream energy and utility company offering investors a solid mix of both defence and growth.

Its gas utility business operates in several jurisdictions and is extremely resilient. This is crucial for the long-term stability of the company and has been extremely evident throughout the pandemic.

That’s because its midstream segment, which offers major growth potential, was impacted by the pandemic. The entire energy industry was affected quite significantly, resulting in AltaGas’s more cyclical business seeing a fair impact on operating income.

Nevertheless, these impacts are short term. AltaGas continues to offer some of the best growth potential in Canada, especially with its recent projects like the Ridley Island Propane Export Terminal.

This long-term growth potential coupled with its current 5% dividend make AltaGas one of the best stocks to buy today.

The top Canadian infrastructure stock

In addition to AltaGas, Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) is one of the best long-term Canadian stocks there is. The company owns some of the best infrastructure assets all over the world.

This stock is attractive, because it offers great diversification, and because you know that Brookfield is scouring the globe to find the very best deal for unitholders.

Currently, it has assets in the utilities and midstream industries like AltaGas. However, it also owns attractive infrastructure assets in the transportation industry, such as ports, railroads, and toll roads. In addition, it also has significant data infrastructure assets.

These long-life infrastructure assets are not only attractive because their earnings are generally resilient, but Brookfield is also continuously looking for ways to improve its operations and profitability.

That’s why Brookfield is one of the top Canadian stocks you can own.

Bottom line

The best investments are in high-quality companies that operate in industries that will be around for decades. Infrastructure assets are at the heart of the economy, so you can bet these two Canadian stocks will be some of the best long-term investments you ever make.

The post 2 Top Canadian Infrastructure Stocks for Long-Term Investors appeared first on The Motley Fool Canada.

More reading

Fool contributor Daniel Da Costa owns shares of BROOKFIELD INFRA PARTNERS LP UNITS. The Motley Fool recommends ALTAGAS LTD., BROOKFIELD INFRA PARTNERS LP UNITS, and Brookfield Infrastructure Partners.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2021