For most stocks on the Toronto Stock Exchange, ownership is a temporary affair. Investors pile in for a projected rebound, a hot sector theme or a single generous dividend, then head for the exits the moment the story sours. True “forever stocks” must pass a far stricter test: they need to keep their customers, retain their pricing power and find productive uses for capital long after today’s market favourites have faded into obscurity.
That usually means backing an essential service, a hard-to-replicate asset base, or a management team with a proven track record of turning invested capital into compounding returns. The business must generate dependable cash flow through recessions while delivering enough growth to outrun inflation over time. By those criteria, two Canadian issuers stand out as core long-term holdings: SmartCentres Real Estate Investment Trust and Waste Connections Inc.
SmartCentres REIT (TSX: SRU.UN) owns and operates a diversified portfolio of retail and mixed-use properties clustered in strategically located, high-demand markets across Canada. Persistent leasing demand and consistently high occupancy have anchored a stable rental revenue stream, driving steady growth in net operating income and funds from operations that fully covers its monthly distributions.
The trust has maintained an unbroken payout streak for years, currently distributing CA$0.15 per unit each month — equal to an annualized yield of 6.4%, a rare combination of high income and monthly cash flow for Canadian investors.
First-quarter results underscore the resilience of the model. Portfolio occupancy reached 97.6% at the end of March, while rent collections held near 99%, pointing to financially healthy tenants and a highly durable income base. Roughly 80% of its 2026 lease expiries have already been renewed at significantly higher rates, with tenant retention remaining robust. Taken together, these metrics lay a clear runway for continued NOI and FFO expansion, reinforcing the long-term sustainability of its distributions.
Beyond its stabilized portfolio, SmartCentres holds an extensive land bank and a large pipeline of mixed-use development projects. As those assets are completed and begin contributing to earnings, they are set to further bolster FFO growth and strengthen the trust’s payout capacity for decades to come.
Waste Connections (TSX: WCN) has turned one of society’s most mundane necessities into a high-margin business with formidable competitive barriers. The company provides waste collection, transfer, recycling and disposal services to roughly nine million residential and commercial customers across the U.S. and Canada, with a deliberate focus on markets where competitive pressure is limited.
Its second-quarter performance reinforced the strength of that strategy. Revenue climbed 6.4% year over year to US$2.6 billion, while adjusted earnings per share advanced to US$1.50. Citing the solid results, management raised its full-year 2026 outlook. The firm has also already closed on acquisitions representing more than US$100 million in annualized revenue this year, extending its footprint in targeted geographies.
The company’s economic moat is tangible and costly to replicate: collection routes, municipal permits, transfer stations and landfill assets all require years of capital investment and regulatory approval to build, granting Waste Connections meaningful and durable pricing power. The market has priced in that quality, with shares trading at roughly 41 times trailing earnings. That premium is not without risk — a sustained slowdown in waste volumes, misjudged acquisitions, landfill environmental liabilities or an erosion of pricing power could all make the valuation look stretched.
Even the highest-quality companies can make for poor investments if purchased at absurd valuations. Investors building long-term positions should add shares gradually, reinvest dividends to compound returns, and avoid mistaking “buy and hold forever” for “set it and forget it.” Management teams turn over, debt profiles shift, regulatory rules evolve and competitive dynamics change — all of which warrant regular review.
Nor can a two-stock portfolio deliver adequate diversification on its own. Still, for Canadian investors seeking core TSX holdings built to weather economic cycles and compound wealth over decades, SmartCentres REIT and Waste Connections offer a compelling blend of cash flow durability, structural competitive advantages and long-term growth potential.
