TFSA Investors: 3 Top Stocks to Buy in November and Hold Forever

Retirement planners seek reliability in this uncertain outlook. These three stocks would be an ideal addition to your TFSA

| More on:
Mature financial advisor showing report to young couple for their investment

Image source: Getty Images

The global equity markets have witnessed strong buying since the beginning of October. The lower-than-expected October inflation numbers in the United States appeared to have increased investors’ confidence. However, some of the concerns persist. Yesterday, the Federal Reserve announced that the production at factories in the United States rose by just 0.1% against analysts’ expectations of 0.2%. Further, the central bank lowered the production numbers for August and September.

So, given the uncertain outlook, investors should be careful while buying stocks through their TFSA (tax-free savings account), as capital erosion could lower their TFSA limit. So, given the volatile environment, here are my three top picks for your TFSA.

Fortis

Fortis (TSX:FTS) would be an ideal buy in this uncertain environment due to its solid underlying utility business. Last month, the company reported a healthy third-quarter performance, with its adjusted EPS (earnings per share) growing by 10.9% to $0.71 per share. The rate base growth, favourable rate revisions, and increased retail and transmission revenue drove its earnings during the quarter. These cash boosters generated $633 million in operating cash flows.

Fortis is also progressing with its $4 billion annual capital expenditure program by spending around $2.9 billion by September. Also, management provided a new $22.3 billion five-year capital expenditure program. The new investments could grow its rate base at a CAGR (compounded annual growth rate) of 6.2%. So, its outlook looks healthy.

Meanwhile, management raised its quarterly dividend by 6% to $0.535 per share, representing the 49th consecutive year of a dividend hike. Supported by its balanced capital investment plans, management hopes to raise its dividends by 4–6% annually through 2027. Fortis is available at an 18% discount from its 52-week high, making it an attractive buy at these levels.

Telus

TELUS (TSX:T) is another stock that could be an excellent addition to your TFSA as the demand for telecommunication services continues to rise. In the recently reported Q3 results, revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) grew by 10% and 11%, respectively. Telus added around 347,000 new customers, representing year-over-year growth of 8%. The company continued capital expenditures by investing approximately $691 million as of September 30 to expand its fiber and 5G network. The telecom provided 5G service to 80% of Canadians by the end of the third quarter.

Additionally, its other verticals, TELUS International, TELUS Health, and TELUS Agriculture & Consumer Goods have also delivered solid performance during the quarter. Supported by these strong performances, the company generated free cash flows of $331 million for the quarter. Also, management raised its quarterly dividend by 7.2% to $0.3511 per share, with its yield currently at 4.83%. Noteworthy, the TSX stock trades at an attractive NTM (next 12 months) price-to-earnings of 21.4, making it an excellent buy in this uncertain outlook.

Waste Connections

Given the nature of its business and strong quarterly performances, Waste Connections (TSX:WCN) would be my final pick. The waste solutions provider’s services of transferring and disposing of non-dangerous solid wastes are experiencing growing demand. In its September-ending quarter, the waste manager posted revenue and adjusted EBITDA growth of 17.7% and 16.3%, respectively. Growth was driven by solid waste pricing growth, increased exploration and production activities, and contributions from asset acquisitions. So far this year, the company has completed acquisitions that could contribute $535 million to its annual revenue.

Supported by elevated prices and year-to-date acquisitions, WCN’s management expects the 2023 revenue to grow in double digits. The management also raised its quarterly dividend by 10.9% to US$0.255 per share. Meanwhile, WCN’s valuation looks expensive at an NTM price-to-earnings multiple of 34. However, given its solid performance, stable underlying business, and healthy growth prospects, paying a premium for the stock should not be a concern.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Dividend Stocks

The Top Canadian REITs to Buy in April 2024

REITs with modest amounts of debt, like Killam Apartment REIT (TSX:KMP.UN), can be good investments.

Read more »

Technology
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

Some of the smartest buys investors can make with $500 today are stocks that have upside potential and pay you…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Dividend Stocks to Buy in April for Safe Passive Income

These TSX Dividend stocks offer more than 5% yield and are reliable bets to generate worry-free passive income.

Read more »

protect, safe, trust
Dividend Stocks

How to Build a Bulletproof Monthly Passive-Income Portfolio With Just $1,000

If you've only got $1,000 on hand, that's fine! Here is how to make a top-notch, passive-income portfolio that could…

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Dividend Stocks

CPP Insights: The Average Benefit at Age 60 in 2024

The average CPP benefit at age 60 in average is low, but claiming early has many advantages with the right…

Read more »

thinking
Dividend Stocks

Why Did goeasy Stock Jump 6% This Week?

The spring budget came in from our federal government, and goeasy stock (TSX:GSY) investors were incredibly pleased by the results.

Read more »

woman analyze data
Dividend Stocks

My Top 5 Dividend Stocks for Passive-Income Investors to Buy in April 2024

These five TSX dividend stocks can help you create a passive stream of dividend income for life. Let's see why.

Read more »

investment research
Dividend Stocks

5 Easy Ways to Make Extra Money in Canada

These easy methods can help Canadians make money in 2024, and keep it growing throughout the years to come.

Read more »