Although the Tax-Free Savings Account (TFSA) may sound like its primary purpose is to hold cash, the advantages it offers Canadians that buy stocks can’t be ignored.
Having the opportunity to buy and hold stocks for years without paying tax on any of your gains can significantly impact your long-term financial goals.
It’s not just popular tech stocks like Apple or Amazon that have earned investors major gains over the years.
Alimentation Couche-Tard, an owner and operator of gas stations and convenience stores, has gained 5,783% over the last 20 years, a compound annual growth rate (CAGR) of 22.6%.
Dollarama is another stock with an impressive track record. Since 2010, it’s up 2,175% — a CAGR of 26.9%.
And right now, the current market environment offers investors many opportunities to buy high-quality stocks for their TFSAs at discounted prices. If you’ve got some cash you’re looking to invest, here are three of the best stocks to buy in February 2023.
A top industrial REIT
Many real estate investment trusts (REITs) are excellent long-term investments, making high-quality stocks Granite REIT (TSX:GRT.UN) ideal for your TFSA.
Granite is an excellent business, because it has a well-diversified portfolio, its occupancy rates are consistently high, and it’s constantly growing its revenue and funds from operations.
In addition, industrial REITs are experiencing significant tailwinds in recent years, as warehouse space demand continues growing and constantly outpaces supply.
And on top of the fact that Granite offers tonnes of long-term growth potential, it also pays an attractive distribution, which has a yield of 3.75% today and has been increased for 11 consecutive years.
Therefore, if you’re looking for high-quality dividend-growth stocks to buy in your TFSA, Granite is one of the best to consider.
A high-quality defensive growth stock to buy in your TFSA
In this uncertain market, some of the best stocks to buy for your TFSA are defensive growth stocks like GFL Environmental (TSX:GFL).
Defensive growth stocks are high-quality businesses that are rapidly expanding their operations and increasing revenue but also operate in defensive industries, making them much more reliable, as the economic environment faces severe headwinds.
GFL provides essential services such as waste management, infrastructure, and soil remediation. It has a massive and diversified portfolio spread across North America, making it the fourth-largest environmental services company on the continent.
The stock just reported its fourth-quarter earnings for 2022 this morning, where it reported revenue growth of 27% year over year. It also introduced 2023 guidance which calls for another increase in revenue of more than 10% year over year.
If you’re looking for high-quality, defensive growth stocks to buy and hold in your TFSA, GFL is one of the best options that investors have.
A low-cost gold stock with an impressive dividend yield
Although the inflation rate is still high in Canada and the U.S., it has begun to trend downward, showing that interest rates could reach their peak sooner rather than later. This makes high-quality stocks, such as B2Gold (TSX:BTO), some of the top investments to buy for your TFSA in 2023.
Rapidly rising interest rates were a major headwind for the price of gold. And when the price of gold is flat or falling, it’s nearly impossible for gold stocks to rally.
With interest rates set to peak this year, a tonne of inflation in the economy over the last year and the uncertainty of the economy adding risk to markets, though, gold stocks have a tonne of potential to rally.
We already started to see a rally begin to materialize late last year when it became apparent that interest rate increases would slow. However, after strong economic reports in January, the market now expects to see a few more interest rate increases in the short term.
But once the signs that the economy is cooling off return, gold could see a significant rally, making high-quality stocks like B2Gold some of the best to buy in your TFSA.
What makes B2Gold so ideal is that it has high-quality operations, a long track record of strong execution, it’s one of the lowest-cost miners in the industry, and it pays an attractive dividend.
Therefore, as the economy continues to cool off, B2Gold is one of the best stocks to buy in your TFSA.