TFSA: 2 Stocks to Create Lasting Generational Wealth

Stock investing can help Canadians accumulate and grow generational wealth that they can pass on to their children and grandchildren.

| More on:
Happy diverse people together in the park

Image source: Getty Images

The money or assets that a person leaves behind is called generational wealth. An amount handed down to at least one generation is legacy or family wealth. In the Great White North between 2016 and 2026, says Canadians will hand down $1 trillion in personal wealth. It would be the largest intergenerational transfer of wealth in history.

A recipient of generational wealth, children or grandchildren, gains a significant financial advantage, although the use is entirely up to them. Building generational wealth means acquiring or investing in assets; stock investing is one way to produce or accumulate wealth. Better still, hold the stocks in a Tax-Free Savings Account (TFSA) for tax-free money growth.

Long-term value creation

Quick-service restaurants are financially stable, but if you’re investing in the fast food industry, Restaurant Brands International (TSX:QSR) or RBI is the logical choice. The $27.7 billion company owns four iconic global brands. Firehouse Subs is the newest in addition to Tim Hortons, Burger King, and Popeyes.

Management believes there’s a huge opportunity to grow following the impressive 8.5% comparable consolidated sales growth last year versus 2021. The rise in delivery and digital sales, menu innovation, and promotion campaigns for the core platforms contributed immensely to the upside.

In 2022, total revenues and net income increased 13.3% and 18.2% year over year to US$6.5 billion and US$1.48 billion, respectively. Outgoing CEO Jose Cil said, “We are focused on being guest-led in everything we do, setting our franchisees up for long-term success and, as a result, setting ourselves, and our shareholders, up for long-term value creation.”  

RBI endured the coronavirus crisis in 2020, when Popeyes’ chicken sandwich became the gem of the pandemic. Burger King (19,789) has the most significant number of restaurants as of year-end 2022. The company invested $400 million in the burger chain in 2022 to drive higher quality restaurant enhancements, remodel, and increase advertising firepower.  

Increases in commodity, labour, and energy costs partly due to the macroeconomic impact of COVID-19 and the Ukraine War are major challenges to the business. Joshua Kobza, the newly appointed CEO, will implement the future growth plans of RBI and the four iconic brands, and Cil will stay on as a strategic advisor.

If you invest today, the restaurant stock trades at $84.88 per share (-3.07% year to date) and pays a decent 3.63% dividend.

Favoured sector

Allied Properties (TSX:AP.UN) owns and operates urban or Class 1 workspaces in Canada’s real estate sector. The $3.3 billion real estate investment trust (REIT) is selling its entire urban data centre (UDC) portfolio and will use the proceeds to retire debt and fund current development projects.

Michael Emory, Allied’s President and CEO, said the sale of the UDC portfolio represents a timely monetization opportunity. Besides supercharging the balance sheet, the REIT could grow the business further in the favoured real estate sector.

The stabilized asset portfolio has over 200 distinctive urban properties. These offices are associated with the traditional TAMI (technology, advertising, media, information) workspaces. At $25.40 per share (+0.25% year to date), you can partake in the juicy 7% dividend yield.

Keep it within the family

Many people want their assets to stay within the immediate family. Canadians have ways to generate enough wealth to secure their family’s financial future. You can save, start a business, invest in real estate, or buy and hold dividend stocks for the long term.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Restaurant Brands International. The Motley Fool has a disclosure policy.

More on Dividend Stocks

A worker uses a double monitor computer screen in an office.
Dividend Stocks

2 of the Best Canadian Stocks That Pay Out Monthly

These two Canadian dividend stocks are some of the best to buy, offering yields upwards of 5.4% and returning cash…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Passive-Income Seekers: 4 Safe Dividend Stocks to Own Beyond 2033

Dividend stocks are great, but only if they continue to perform after downturns as well. In the case of these…

Read more »

clock time
Dividend Stocks

How Investors Can Build a $1 Million Portfolio in 12 Years

If you can handle it, you can certainly create a million-dollar portfolio in just 12 years, especially considering this dividend…

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

4 Big Dividend-Paying Stocks for 2023

These four stocks all earn strong cash flow and offer attractive dividend yields, making them some of the best to…

Read more »

grow dividends
Dividend Stocks

This 7.5 Percent Dividend Stock Pays Cash Every Month

If you need cash now, this dividend stock is certainly one I would consider that could double in share price…

Read more »

Path to retirement
Dividend Stocks

Need Passive Income? Turn $6,000 Into $106 Every Month

Find the right dividend stock for stable growth and you can turn $6,000 into $106 each month!

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

2 Top Stocks to Supercharge Your TFSA Into a Cash Cow

IA Financial and Brookfield Renewable Partners are great passive income generators for new TFSA investors.

Read more »

edit Real Estate Investment Trust REIT on double exsposure business background.
Dividend Stocks

Invest in This 7.5% Dividend Stock for Passive Income

This dividend stock could provide you with double the amount of annual passive income by investing now instead of at…

Read more »