Investing in a TFSA is essential if you aspire to achieve financial independence. This is because investing in one of these accounts allows investors to generate returns without having to pay additional taxes. However, it’s very important to hold shares of reliable companies in a TFSA. This is because losses can’t be claimed, and investors only have a limited amount of contribution room available. In this article, I’ll discuss three stocks investors should buy in a TFSA today.
One of the top tech stocks in Canada
As a younger investor, I’m very interested in tech stocks. However, I believe all investors should consider buying shares of Constellation Software (TSX: CSU). Since its IPO, this stock has been a major winner, gaining more than 10,500%.
For those that are unfamiliar, Constellation Software is an acquirer of vertical market software companies. It has found success by following a very strict acquisition formula. Generally, the company seeks out businesses that have an outstanding manager, are consistently profitable, and exhibit above average growth. For much of its history, Constellation Software has focused on small- and medium-sized businesses. However, in 2021, the company announced that it would finally begin targeting large VMS businesses.
If you’re interested in a stock with a long history of outperformance, add Constellation Software to your TFSA today.
Buy this top dividend stock
Because TFSAs should be composed of steady businesses, I believe the bulk of that portfolio should feature dividend stocks. That’s because excellent dividend stocks tend to be established companies with a lot of cash on hand. That gives the company an excellent chance to withstand periods of economic uncertainty. The best dividend stocks are listed as Canadian Dividend Aristocrats. These are companies that have raised dividend distributions for at least five consecutive years.
Canadian National Railway (TSX: CNR)(NYSE: CNI) appears as one of the elite Canadian Dividend Aristocrats. It has increased its dividend in each of the past 25 years, making it one of only 11 TSX-listed companies to achieve that milestone. Canadian National operates nearly 33,000 km of track, spanning from British Columbia to Nova Scotia. A well-recognized brand across the country, this stock could be a cornerstone position in your portfolio.
This company could grow much larger
As of this writing, Telus (TSX: T)(NYSE: TU) is already one of the biggest companies in Canada. It operates the largest telecom network in the country, providing coverage to 99% of the Canadian population. However, that aspect of its business isn’t the most interesting. In fact, Telus’s growth in the future might not even come from its telecom business. I believe Telus’s healthcare offerings are what investors should focus on.
Today, Telus offers both professional and personal care solutions. In terms of its professional solutions, Telus offers a suite of EMR services and a variety of administrative solutions. With respect to personal care, Telus offers MyCare, which is its telehealth app. Using that platform, patients can seek medical professionals from the comfort of their own homes.
