The S&P/TSX Index hit a record high on December 20 and ultimately closed at 16,159.67 — up 0.16%. The index has climbed 5.7% in 2017.
In early December, the Canada Revenue Agency (CRA) confirmed that the tax-free savings account (TFSA) contribution for 2018 will increase by $5,500. Previously, I’d speculated that the limit could see an uptick in 2018 due to inflation, but the federal government has elected to hold the increase steady.
With that in mind, let’s take a look at five of my top stocks to own in your TFSA heading into 2018.
Brookfield Renewable Partners stock has climbed 9.8% in 2017 as of close on December 20. According to a report from the Deloitte Center for Energy Solutions, new U.S. policy could complicate growth for the renewables industry. However, the report still predicted that tailwinds would carry renewables in 2018.
Brookfield Renewable Partners reported a net loss of $32 million compared to a net loss of $19 million in the prior year. However, adjusted EBITDA was $378 million in comparison to $332 million in Q3 2016. CEO Sachin Shah reiterated its commitment to delivering on 12-15% annualized returns looking forward. The stock also boasted a quarterly dividend of $0.60 per share with a 5.5% dividend yield.
You simply cannot go wrong with owning Canadian bank stocks in your TFSA with the capital growth and dividend income available. RBC stock has climbed 12.6% in 2017. RBC saw its net income jump 10% to $11.4 billion for the full year in 2017. It posted double-digit growth in all of its major business segments. The stock also offers a quarterly dividend of $0.91 per share, representing a 3.6% dividend yield at offering.
Canopy Growth Corp. (TSX:WEED)
In late November, I’d pinpointed Canopy as the safest cannabis producer in the midst of the broader cannabis stock surge. The company has no U.S. exposure, so it cannot fall victim to an ongoing TSX review that threatens possible relisting for other companies. With the highest market share among all cannabis producers and an inventory prepared for the July 2018 roll-out, Canopy stock is in a great position for another monster year.
Enbridge stock has declined 12.5% in 2017. The company has struggled with some of its larger projects, including the Line 3 pipeline expansion in the United States. However, the company recently announced it will pursue the sale of $3 billion in assets in 2018. Enbridge should be provided with clarity over the future of its projects in the first half of 2018. Oil prices have also stabilized after OPEC extended its production cut to the end of 2018. Best of all, Enbridge offers a highly attractive 5.4% dividend yield that leadership has vowed to grow 10-12% annually into 2021.
Avigilon Corp. (TSX:AVO)
Avigilon stock has increased 66.5% in 2017. The company designs video surveillance software and equipment. This industry is expected to record compound annual growth rate (CAGR) of 15.4% from 2017 to 2022 according to research by MarketsandMarkets. In the third quarter Avigilon posted record revenue of $108.2 million compared to $95.8 million in the prior year. Avigilon continues to be a top growth stock option heading into 2018.
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Fool contributor Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool owns shares of Enbridge. Brookfield Renewable Partners is a recommendation of Dividend Investor Canada. Avigilon and Enbridge are recommendations of Stock Advisor Canada.