As capital gains and investment income within the Tax-Free Savings Account, or TFSA, are not taxed, it helps in accumulating more wealth in the long term. Further, the recent correction in several top-quality TSX stocks provides an excellent opportunity for investors to add these stocks to their TFSA portfolios.
So, if you are planning to allocate your $6,000 TFSA contribution to stocks, consider buying these top stocks now.
Shopify
The sharp pullback in Shopify (TSX: SHOP)(NYSE:SHOP) stock makes it an attractive investment to hold within your TFSA. It’s worth noting that Shopify stock corrected over 52% from its high following the recent selloff, representing a solid entry point at current levels.
The overall selling in high-growth tech stocks, reopening of retail locations, and difficult comparisons dragged Shopify down. However, this e-commerce giant continues to gain market share and expand its product base, which supports my bullish outlook.
I expect the shift in selling models towards omnichannel platforms, strengthening of fulfillment network, new product launches, and new selling channels will likely drive Shopify’s financials and, in turn, its stock price.
Docebo
Next on this list are the shares of corporate e-learning solutions provider Docebo (TSX: DCBO)(NASDAQ: DCBO). It has declined over 46% from the 52-week high. While profit taking and fear of moderation in its growth rate amid economic reopening led investors to dump its stock, Docebo is growing rapidly and has multiple growth vectors.
For instance, its annual recurring revenues remain strong, while growing enterprise customer base, higher contract value, and customer acquisitions bode well for growth. Also, its focus on opportunistic acquisitions, new products, high retention rate, and geographic expansion provide a strong base for growth.
Overall, the pullback in Docebo’s stock price, high-growth business model, robust recurring subscription revenues, and productivity savings are likely to support the recovery in Docebo stock.
goeasy
Subprime lender goeasy (TSX: GSY) is another solid investment worth holding in your TFSA. Its high-growth business, robust profitability, and strong dividends payouts make it attractive. Further, the recent pullback in its price represents a buying opportunity.
Looking ahead, higher loan originations, increase in loan ticket size, new product launches, geographic and channel expansion, and acquisitions will likely accelerate its top-line growth rate. Meanwhile, operating leverage from higher sales, solid payment volumes, and cost savings will likely cushion its margins.
goeasy’s strong profitability has driven its dividend higher over the past seven years. Meanwhile, the expected increase in its bottom line suggests that goeasy could continue to boost its shareholders’ returns through increased dividend payments.
Telus
Telus (TSX: T)(NYSE: TU) is the last stock on this list. Its profitable business and growth opportunities stemming from the expansion of 5G support my bullish outlook.
Telus’s diversified revenue streams, favourable sales mix, growing subscribers base, and increase in average revenue per user will likely drive its revenues and margins in coming quarters. Furthermore, expansion of 5G coverage and PureFibre will accelerate its growth rate.
Telus has returned $15 billion to its shareholders in the form of dividends since 2004. Further, under its multi-year dividend-growth program, Telus will likely hike its dividend by 7-10% in the coming years.
