TFSA Investors: Don’t Wait. Now Is the Time to Buy These Top TSX Stocks

These top TSX stocks offer long-term growth, dividends, as well as significant value at current levels for TFSA investors.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published March 30, 2023 1:30 pm EDT

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The TSX today offers some stellar deals right now for Tax-Free Savings Account (TFSA) investors. Once you have most of your portfolio thought through with your financial advisor, there are some significant deals you can lock up with the remaining cash you have, including some of the top TSX stocks on the market.

Hourglass projecting a dollar sign as shadow — Source: Getty Images

What makes a top TSX stock?

I consider top TSX stocks to be blue-chip companies on the TSX today — specifically, those that fall under the TSX60. If you’re going to look for some top TSX stocks, I would certainly start there.

However, if you’re a TFSA investor looking for a deal that’s going to last years, if not decades, in the future, then you need to look at industries.

Top TSX stocks I would consider are those providing essential services — those that offer a deal now but are due for a sustained rebound that should last decades. In this case, these are the ones I would recommend on the TSX today.

The top TSX stocks I’d pick today

If you’re looking for essential companies on the TSX today, there are a few I would recommend that offer significant value. First of all, there are the Big Six banks, but above them all, I would choose Royal Bank of Canada (TSX: RY).

Royal Bank stock offers value trading at 12.13 times earnings as well as a dividend yield at 4.16%. It’s come back from every downturn strong and currently is the largest of the banks by assets. It’s also expanding and offers lucrative revenue streams in the wealth and commercial sector.

Another top stock I would invest in is Canadian Tire (TSX: CTC.A). This is one of the TSX stocks again trading in value territory at 9.67 times earnings. While it’s not necessarily an essential service provider, it does offer essential products. Further, it’s a retailer that’s proven, even during a downturn, that it can offer the best products at a cheap price due to having storage on site.

Canadian Tire stock holds a dividend yield at 4.09% as of writing, so again it’s a great deal considering what’s on offer on the TSX today.

Finally, a truly essential service is power. That’s why although it’s new, I would certainly consider Hydro One (TSX: H) on the TSX today. It’s one of the TSX stocks that provides utilities through hydro power, which is also a renewable energy source. So, as we move to a clean energy future, Hydro stock should continue to climb.

Right now, it offers a 3.04% dividend yield, and remains at fair value trading at 21.35 times earnings. Given how new it is, I would certainly want this in my TFSA for decades. So, now is the right time to buy.

Bottom line

If you’re looking for long-term holds, there are top TSX stocks out there offering true value and high dividends on the TSX today. So, don’t wait any longer. Pick them up now, lock in some fixed income, and see shares climb for years tax free.