3 Workhorse TSX Stocks to Add to Your TFSA

Given their solid underlying businesses and healthy growth prospects, these three TSX stocks are an excellent addition to your TFSA.

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Last week, the U.S. Department of Labor reported the CPI (consumer price index) rose by 4.9% in April compared to the year-ago month. It was the lowest rise over the last two years. However, it is still higher than the Federal Reserve’s guidance of 2%. So, I believe the central bank will not be in a hurry to lower its benchmark interest rates.

Higher inflation and prolonged high-interest rates could hurt global growth. As a result, the equity markets could remain volatile in the near term. So, it is prudent to strengthen your TFSA (tax-free savings account) by adding quality stocks, as the decline in stock values can lower your contribution room. Meanwhile, given their solid underlying businesses and strong cash flows, the following three TSX stocks could be an excellent addition to your TFSA in this uncertain outlook.


Dollarama (TSX:DOL) is a Canadian discounted retailer offering various consumable products at attractive prices. Supported by its 1,486 stores across 10 provinces, the company has a strong presence in the country, with 80% of the population within 10 kilometres of its store. Given its superior direct sourcing and buying capabilities and efficient logistics, the company offers excellent value to its customers, thus driving its sales even in the challenging macro environment.

Supported by its solid underlying business and aggressive expansion with new store openings, Dollarama has grown its sales and net earnings at a CAGR (compounded annual growth rate) of 11.2% and 17.4% since 2011, respectively. Meanwhile, I expect the uptrend in the company’s financials to continue. After adding an average of 70 new stores per year for the last 10 years, the company’s management hopes to grow its store count to 2,000 by 2030. Further, it plans to add 410 new Dollarcity stores over the next seven years.

Besides, its extensive product offerings, lower price points, and effective capital utilization could support its growth even during this inflationary environment. So, I believe Dollarama, a defensive stock with tremendous growth potential, would be an excellent buy in this volatile environment.


Fortis (TSX:FTS) is a diversified utility company meeting the electric and natural gas needs of 3.4 million customers. With 93% of its assets involved in the low-risk transmission and distribution business, the company generated stable and predictable financials irrespective of the economy. Supported by solid underlying businesses, the utility has delivered an average annualized return of 9.5% over the previous 10 years. It has also raised its dividends for 49 consecutive years, with its yield currently at 3.86%.

Meanwhile, Fortis is expanding its business and has planned to spend around $22.3 billion through 2027, which could grow its rate base at a CAGR of 6.2%. It has already made a capital expenditure of $1 billion in the first quarter and expects to invest around $4.3 billion this year. So, given its risk-free business, high growth prospects, and healthy dividend yield, Fortis would be an ideal addition to your TFSA.


Telecommunication has become an essential service in this digitally connected world. Besides, these companies earn a substantial percentage of their revenue from recurring revenue sources, thus making them excellent defensive bets. So, I have selected Telus (TSX:T) as my final pick. The company reported an impressive first-quarter performance earlier this month, with a record addition of 163,000 new customers and ARPU (average revenue per user) growth of 3.8%. Its technology-oriented verticals, Telus International and Telus Health, also witnessed solid growth during the quarter.

Telus’ overall revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) grew by 16% and 11%, respectively. Supported by its solid financials, the company’s management raised its dividends by 7.4% to $0.3636/share, the 24th increase since May 2011. As the company expands its 5G and broadband infrastructure, I expect the upward momentum in its financials to continue. Besides, management hopes to grow its dividends by 7%–10% annually through 2025. Considering all these factors, I am bullish on Telus despite the challenging environment.

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 and TELUS. The Motley Fool has a disclosure policy.

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