The Canadian stock market remains down by about 10.64% year to date as of writing. But there are some great deals for Canadians willing to wait it out. In fact, there are some even trading in value territory that are up in 2022. That is why now is the time to buy Canadian stocks for your Tax-Free Savings Account (TFSA).
So, today, I’m to focus on three Canadian stocks I think you should buy up on the TSX today. Combined, you could create a portfolio worth $250,000 in the next decade alone.
Look to ongoing industries
If you’re going to find Canadian stocks that are going to last another decade, you want to look at the industries each are in. I’ve really been focusing on renewable energy. It’s not just governments focusing on climate change now but companies, too. And this is where major change happens.
It’s also where you can find major opportunities, which is why companies are interested in the first place. Some of the best deals out there on the TSX today, however, are these future-focused companies. That is why I would certainly consider them if you’re searching for investments for your TFSA.
Three Canadian stocks
The Canadian stocks I’d choose today are Hydro One (TSX: H), Brookfield Renewable Partners (TSX: BEP.UN)(NYSE: BEP), and Magna International (TSX: MG)(NYSE: MGA). These companies are all in the renewable sector and offer a stellar growth opportunity.
Hydro One is actually doing quite well on the TSX today among Canadian stocks. Hydro One deals with electric power and has seen incredible improvements over the last few years. Shares are up 9% year to date as of writing and 89% in the last five years for a compound annual growth rate (CAGR) of 13.6%. Yet it still trades at just 11.62 times earnings and offers a dividend yield of 3.21%.
Brookfield owns renewable properties all around the world and continues to expand its business. That’s now especially in Europe, where sanctions against Russia have led many countries to no longer want to rely on others for power. Shares are up 6.82% year to date and 410% in the last decade for a CAGR of 17.68%. You can also lock in a 3.48% dividend yield.
With Magna, you can ease into a transition to electric vehicles. The company has made partnerships with major auto manufacturers to help power the transition to these cars. But Magna still supports internal combustion engine vehicles as well. Shares are down 22% year to date but are up 417% in the last decade for a CAGR of 17.85%. It offers a major deal among Canadian stocks, trading at 14.68 times earnings, and has a dividend of 2.92%.
Creating that $250K
If you were to invest in all three of these Canadian stocks, here’s how you can create $250,000. Each would have to make $83,333 in the next decade. So, let’s say you made an investment and reinvested your dividends. For Hydro, that would take an investment of 560 shares for $19,600. For Brookfield, it would be 280 shares for $13,160. Finally, Magna it would take 163 shares for $12,877. That’s a total investment of $45,637 in these Canadian stocks on the TSX today to create $250,000 in just a decade. And all it takes it reinvesting your dividends.
