2 Dividend Stocks to Hold for the Next 20 Years

Finding dividend stocks you can confidently hold for two decades is about owning durable businesses that can grow earnings and payouts through multiple economic cycles. In the Canadian market, Loblaw  (TSX:L) and CCL Industries (TSX:CCL.B) should be on your radar as long-term candidates.  

Durable businesses built to last

Loblaw’s strength starts with its dominant position in essential retail. As Canada’s largest food retailer, it controls roughly 27% of the grocery market with more than 2,400 locations. Its footprint spans traditional grocery stores, discount banners like No Frills and Maxi, and the high-margin Shoppers Drug Mart chain. 

What makes Loblaw particularly resilient is its adaptability. In recent years, it has leaned further into discount formats and private-label brands such as President’s Choice and No Name, which now account for a meaningful portion of sales. This shift not only protects margins during inflationary periods but also strengthens customer loyalty. Regardless of economic conditions, consumers still need food, medicine, and everyday essentials — giving Loblaw a reliable revenue base.  

Meanwhile, CCL Industries operates in a very different space but with equally strong durability. As the world’s largest converter of specialty labeling and packaging materials, it serves industries like healthcare, food, and consumer goods — sectors that remain steady even in downturns.  

A key advantage for CCL Industries is how deeply embedded it is in its customers’ operations. Many of its products, especially in pharmaceuticals, are “specified-in” during development. Switching suppliers can take months, creating high switching costs and sticky, recurring revenue. Combined with a global footprint across more than 40 countries and over 200 production facilities, CCL Industries is diversified and resilient.  

Proven dividend growth and compounding power 

Both companies don’t just survive — they compound. Over the past decade, Loblaw has delivered annual adjusted earnings-per-share (EPS) growth of about 10.8%, while CCL Industries has achieved over 10.5% growth. 

That growth has translated into reliable dividend increases. Loblaw has raised its dividend for roughly 14 consecutive years, with a 10-year growth rate of 8.3%. CCL Industries goes even further, with about 24 consecutive years of increases and a 10-year growth rate of 15.6%.  

While their current yields — around 0.9% for Loblaw and 1.7% for CCL Industries — may seem modest, that’s not the point. These are not high-yield plays; they are long-term compounders. Investors are effectively trading a lower starting yield for solid dividend growth and capital appreciation over time. 

Valuation and long-term strategy 

At about $63 per share at writing, Loblaw stock appears fairly valued based on analyst consensus, though it trades at about a 50% premium relative to its long-term historical normal valuation. This reflects its defensive qualities with the market willing to pay a premium for its shares. 

CCL Industries, however, looks more attractively priced. At about $83 per share at writing, it trades at a roughly 18% discount to the consensus analyst target and about 10% below its long-term historical valuation, offering a potentially better entry point for long-term investors.  

Rather than trying to time the market, a disciplined approach like dollar-cost averaging can help investors build positions in both stocks over time while managing valuation risk.  

Investor takeaway

Loblaw and CCL Industries offer a powerful combination of durability, consistent earnings growth, and long dividend track records. Their businesses are built around essential goods and services, giving them resilience through economic cycles. 

While their yields are modest, their long-term compounding potential makes them strong candidates for a 20-year holding period. For patient investors, steadily accumulating shares in these companies could be a smart way to build long-term wealth.   

The post 2 Dividend Stocks to Hold for the Next 20 Years appeared first on The Motley Fool Canada.

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More reading

• 3 TSX Stocks That Look Ready for a Strong Second Half
• 2 Canadian Stocks That Could Benefit From a Stronger Loonie
• This Monthly TFSA Stock Pays a 5.4% Dividend – and It’s Worth Considering Now
• The 3 TSX Stocks I’d Be Most Eager to Buy at This Moment
• 3 TSX Stocks to Own if Volatility Sticks Around

Fool contributor Kay Ng has no position in any of the stocks mentioned. The Motley Fool recommends CCL Industries. The Motley Fool has a disclosure policy.