Best Long-term Canadian Stock to Hold

In this article, we will discuss the Best Long-term Canadian Stock to Hold.

Some Canadian stocks can be incredibly volatile—but when the underlying business remains strong, those price dips can actually present rare buying opportunities. One such case today is Air Canada (TSX:AC). Despite being one of the country’s most recognized companies, its stock is trading nearly 30% below recent highs and still about 70% off its pre-pandemic peak. Yet, there are signs this airline could be primed for a long-term comeback.

What Makes Air Canada the Best Long-term Canadian Stock to Hold?

Air Canada isn’t just any airline—it’s the backbone of the country’s air travel. As Canada’s largest carrier for both domestic and international flights, it serves over 150,000 passengers daily at peak capacity. Its success is closely tied to the health of Canada’s tourism, trade, and business travel. That’s why the pandemic was so devastating to its operations. And even today, the airline hasn’t fully bounced back.

Currently trading near $19 per share, Air Canada is far from the $50 range it touched in early 2020. Though there was a modest recovery in 2021 and 2022, the stock has mostly hovered in a low flight path—due in part to cost pressures, labour challenges, and ongoing global volatility.

Signs of a Turnaround

Still, beneath the surface, things are improving. In Q1 2025, Air Canada generated $5.2 billion in revenue—just a slight dip from $5.23 billion the year before. The airline posted an adjusted EBITDA of $387 million and a net loss of $108 million, which isn’t unusual for the seasonally slower first quarter.

The real highlight is growing capacity. Available seat miles climbed 11% year over year, and the load factor—the percentage of seats filled—reached an impressive 84.5%. Clearly, demand for air travel is rebounding, and Air Canada is responding by scaling its operations.

Growth Strategy in Motion

The airline is also expanding high-demand international routes, such as new service from Montreal to Madrid and increased frequencies to destinations in South America and Asia. These long-haul routes are typically more profitable, helping improve margins. On top of that, Air Canada is upgrading its digital systems and modernizing its fleet with more fuel-efficient aircraft.

Debt remains a concern. The company still carries about $11.9 billion in net debt, a legacy of the pandemic era. However, it’s aggressively paying it down. In 2024, it generated $1.1 billion in free cash flow and continues to focus on strengthening its balance sheet.

Why It Might Be a Long-Term Buy

Despite its challenges, Air Canada is showing meaningful progress—and investors have taken notice. The stock has rebounded roughly 46% from its 52-week low, a sign that sentiment may be shifting. For long-term investors willing to weather some turbulence, this could be one high-potential Canadian stock worth holding onto. While Air Canada can be considered as the Best Long-term Canadian Stock to Hold, the investors are required to take into account their risk appetite before investing.