TFSA Investors: 2 Top TSX Stocks to Buy Today

These two top TSX stocks offer both growth and defensive qualities, making them some of the best investments to buy for your TFSA.

| More on:

Image source: Getty Images

Tax-Free Savings Accounts (TFSAs) have become a popular investment vehicle for Canadians since they were introduced back in 2009. The fact that you can buy top TSX stocks and watch your investments grow tax-free, as well as make withdrawals without incurring any penalties, means that TFSAs are some of the best tools that Canadians have at their disposal.

It also shows why it’s essential to buy high-quality TSX stocks in your portfolio. You, of course, want to own businesses that can grow significantly to grow the value of your capital. But you don’t want to pay any tax on the gains.

At the same time, though, you want to avoid risky stocks to not only avoid losing your hard-earned money but also because our contributions are limited each year and should be used to invest in outstanding companies.

That’s why some of the best stocks to buy are well-established companies that pay a dividend. By investing in these top TSX stocks, TFSA investors can benefit from both capital appreciation and the potential for attractive dividend income, all while enjoying the significant tax advantages provided by their TFSAs.

So, if you’re looking to find some of the top stocks to buy for your TFSA today, here are two top companies to consider adding to your portfolio right now.

One of the top growth stocks to buy on the TSX today

One of the best long-term growth stocks on the TSX that you’ll want to buy now is Alimentation Couche-Tard (TSX:ATD).

Couche-Tard owns thousands of convenience stores and gas stations all over the world. These are businesses that are relatively defensive, and because its portfolio is diversified globally, the stock has done a lot to minimize risk.

However, as attractive as its defensive qualities are, Couche-Tard is one of the top TSX stocks to buy due to its long-term growth potential.

For years, it has expanded its business by making value-accretive acquisitions in addition to the organic growth the company was seeing.

So although its consistently increasing dividend has a current yield of just 0.85%, Couche-Tard retains the majority of its capital to continue investing in growing the business.

That strategy has seemed to work well for the growth stock as well as its investors. In fact, over the last 10 years, Couche-Tard has grown at a compounded annual growth rate of 22.7%, earning a total return of more than 675%.

Furthermore, in addition to investing in the business to expand its operations, Couche-Tard also takes advantage of its stock trading undervalued to buy back shares and continue growing shareholder value. For example, so far in fiscal 2023, the stock has already bought back over 6% of its float.

So if you’re looking for top TSX stocks to buy and hold in your TFSA for years, Couche-Tard is one of the best you can consider.

A top defensive investment that can protect and grow your capital over the long haul

Another top TSX stock that you can buy and hold long term, and one that can help protect your capital in this environment, is Brookfield Infrastructure Partners (TSX:BIP.UN).

Brookfield is an intriguing stock because it’s highly defensive. However, BIP is also an excellent long-term growth stock, which is why it’s such an ideal company to buy and hold for years.

The stock owns essential infrastructure assets such as railroads and ports, telecom towers and data centres, as well as utility companies and pipelines. Furthermore, these assets are diversified all over the world.

So not only is Brookfield’s infrastructure portfolio diversified, but it also shows how the company looks all over the world to find the most attractive and highest-potential assets to invest in.

Brookfield’s business model is to consistently look to recycle capital and sell off more mature assets. It then uses that cash to invest in new or undervalued projects that can help the company grow its operations for years to come.

Furthermore, Brookfield returns tonnes of cash to investors. Currently, its distribution has a yield of roughly 4.75%, and management aims to increase that payout by 5% to 9% each year.

So if you’re looking for top TSX stocks that you can buy for your TFSA today and hold for years, Brookfield Infrastructure is an ideal investment.

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 Daniel Da Costa has positions in Brookfield Infrastructure Partners. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

More on Investing

money cash dividends
Dividend Stocks

TFSA Investors: Create $313 in Passive Income by Buying in 114 Shares in 3 Dividend Stocks

Canadian investors seeking passive income from dividend stocks should think beyond the first year, but here is what you could…

Read more »

Various Canadian dollars in gray pants pocket

TFSA Passive Income: Make $316/Month

Investors can look to generate passive income in their TFSA with monthly dividend stocks like TransAlta Renewables Inc. (TSX:RNW).

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

This Canadian Monthly Dividend Stock Pays 11.5% Every Year

Here’s a great Canadian dividend stock you can consider buying now to earn handsome passive income each month.

Read more »

rail train

Down 9.8% From Highs, CN Rail Stock Looks Like a Great Value Today

CN Rail (TSX:CNR) may not be a steal, but it appears like a great value, even as tides of recession…

Read more »

Dividend Stocks

Already up 15.87%: Is Dollarama Stock Still Worth Buying Today?

Is Dollarama stock worth buying as a defensive growth stock, despite inflation normalizing in recent months?

Read more »

grow money, wealth build
Dividend Stocks

Looking for Dividend Stocks in Canada? Check Out These Top Picks

Invest in these two top dividend stocks in Canada for long-term wealth growth through a self-directed passive income stream.

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background

Better Dividend Buy: Enbridge Stock or CNQ Stock?

Enbridge and Canadian Natural Resources are TSX giants with great track records of dividend growth. Is one stock now oversold?

Read more »

value for money
Dividend Stocks

Here are 4 TSX Stocks That Look Like Great Buys for Value Investors

Four TSX stocks with strong fundamentals but underperforming in 2023 are great buys for value investors.

Read more »