The Tax-Free Savings Account (TFSA) is arguably the most popular of the two main registered accounts, even if you save exclusively for retirement. But it has its limitations. The account has been available to Canadians since 2009, but its entire contribution limit has yet to exceed even $100,000 and may take at least two more years.
Assuming you have only contributed to the TFSA and haven’t invested the savings anywhere, you would be sitting on about $88,000 — too small a capital “seed” to grow a million-dollar tree. But a few stocks might give you a realistic chance of reaching that number, assuming they repeat or surpass their star performance of the past and you are prepared to hold them for at least two decades.
A trucking company
Like railways and ships, trucking companies have been a crucial part of the global supply chain, covering the last legs of deliveries. Trucking companies like TFI International (TSX:TFII) have become even more important in today’s e-commerce-driven economy, when most consumers get things delivered to their doorsteps, resulting in a significant increase in these transportation activities.
However, calling TFI International undermines its potential and position as a logistics company with a massive network of facilities and operating companies.
The company has experienced powerful growth in the last one-and-a-half decades, and the stock has faithfully followed that rise. The stock has risen by about 620% in the last decade, and the overall returns (including dividends) have been close to 800%. Assuming it can repeat this feat, the stock may be able to grow its capital by about 16-fold in the next two decades.
A cargo airline
Cargojet (TSX:CJT) is another major name in the supply chain/logistics space, but it dominates the Canadian sky. It’s the premier choice for time-sensitive cargo in Canada and uses its 38-aircraft fleet to cover over 70 international routes daily.
The stock is currently trading at a massive 54% discount, but it’s also quite undervalued with its competitive edge intact, so recovery may just be a matter of time.
The “golden” period of growth for the Cargojet stock covered the nine years between Jan. 2011 and Jan. 2020, when it rose by about 1,200%. But even if we take the less-flattering last decade as a benchmark, the collective returns were over 1,100%. That can be extrapolated to about 22-fold growth in two decades.
A retail chain
As a leading value retailer, Dollarama (TSX:DOL) has become a household name in Canada. About four out of every five Canadians live within 10 kilometres of a Dollarama store, and there are about 1,486 of them across the country — a number the company is aiming to push to about 2,000 in less than a decade.
Most industry leaders with a similar business model and presence are cherished for their stability and resilience, but Dollarama stock has also developed a reputation for growth. The stock returned over 600% to its investors (via capital appreciation and dividends) in the last decades. If it maintains this pace, that may lead to about 12-fold growth/returns in the next two decades.
A real estate service company
FirstService (TSX:FSV) is the largest manager of residential communities in North America, with about 8,600 properties/communities under its purview. It’s also a leader in essential property services and has multiple brands under its banner. This leadership status and a strong position in an almost evergreen market give it a strong edge.
The stock is not a decade old yet, but so far, the performance has been quite compelling. It has risen by about 480% in the last eight years. So, if we extrapolate 60% a year growth for two decades, that’s about 12-fold capital appreciation. It may bump the growth up to 13 or 14 times, but for now, we are sticking with 12 for the projection.
Foolish takeaway
If we divert $22,000 from a fully stocked TFSA to each of these stocks and let the growth play out for two decades, you can (theoretically) reach $1,300,000. This even gives us some room if a stock underperforms. Even though only two of the four are large-cap and, hence, technically blue-chip stocks, all four are leaders in their space and stable long-term holdings.
