Unlock Your Homeownership Goals: 1 Stock for a Growing FHSA

Fortis (TSX:FTS) stock may be a boring dividend play, but the cash cow of a utility may be a fine addition to a long-term FHSA portfolio.

| More on:
House Key And Keychain On Wooden Table

Image source: Getty Images

The FHSA (First Home Savings Account) is a great new account that young, aspiring homeowners should look into once it becomes available at their bank. Undoubtedly, FHSA investors can stash any funds in a risk-free security or just leave it in cash. Interest rates have become more attractive in recent years, after all. Though I’m not against having some cash and risk-free, interest-paying assets, I think FHSA investors may wish to consider equities to grow their wealth at an above-average rate.

Before opening an account, be sure to check in with your advisor to confirm your eligibility.

It’s a tough year to be an investor

Indeed, it’s tough to be an investor of stocks or bonds these days, with a recession on the way and the impact of interest rates beginning to weigh on earnings. Though the Bank of Canada may be quicker than the U.S. Federal Reserve to reverse its stance on rates at some point over the next 18 months, investors shouldn’t expect a fast-moving bull market to storm out of the gate anytime soon.

I still view neglected value stocks as some of the best plays for the next five years and beyond. Whether you’re looking to build wealth in a Tax-Free Savings Account, Registered Retirement Savings Plan, or FHSA.

In this piece, we’ll look at one TSX stock that I think could fare well over the next five to 15 years. Whether you’re looking to break into the housing market in five years down the road or the next 10-15 years, the following “Steady Eddie,” I believe, is a fine addition to any FHSA.

Even if your bank doesn’t currently offer the FHSA, it’s never too early to begin pondering the type of names you may wish to put in it. Let’s have a look at underrated utility company Fortis (TSX:FTS).


Fortis is a Canadian utility firm that’s been back on the retreat in recent weeks, now down nearly 7% from its May 2023 highs. I find the dip to be excessive, given the type of stable operating cash flows you’ll get from the name, as Canada’s economy gets put to the test, with a potential rate-driven recession.

Indeed, Fortis’s first-quarter results weren’t at all bad. Still, it seems like the risk appetite has shifted ever since the Nasdaq 100 moved into a bull market (a rise of at least 20% from lows). In any case, Fortis stock remains a bond proxy for investors who seek “slow and steady” gains over the course of many years.

Fortis won’t bring your FHSA into overdrive, but at the very least, you’ll likely gain a steady reward for the risks you take on. At 19.5 times trailing price to earnings, with a 3.9% dividend yield, I view FTS stock as a better bet than bonds or even Guaranteed Investment Certificates, given the potential for superior total returns (dividends + capital gains).

Foolish bottom line

If you’re thinking about what to put in your future FHSA, it never hurts to start putting together a list of stocks. Personally, value plays like Fortis stand out as compelling options, even if risk appetite surges in the face of a downturn.

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 Joey Frenette has positions in Fortis. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

More on Investing


These 2 Stocks Carry a Lot of Risk, But Their Upside Is Huge

These two stocks have some significant risks, but they trade so cheaply that they offer unbelievable capital gains potential.

Read more »

Payday ringed on a calendar
Dividend Stocks

Boost Your Monthly Dividend Income With This TSX Gem

A high-yield TSX gem in the real estate sector can boost your monthly dividend income.

Read more »

Bank sign on traditional europe building facade
Bank Stocks

Bank Stocks Look Like a Steal: Here’s My Favourite for October 2023

TD Bank (TSX:TD) stock looks dirt cheap, as it continues to fluctuate in this rocky economic environment.

Read more »

little girl in pilot costume playing and dreaming of flying over the sky

Better Buy: Air Canada Stock or WestJet Airlines?

With the airline industry yet to recover fully from the pandemic, is Air Canada one of the top stocks to…

Read more »

oil and gas pipeline
Dividend Stocks

Is Enbridge Stock a Buy for its 7.6% Dividend Yield?

Enbridge stock is a TSX giant that offers investors a tasty dividend yield of 7.6%. Is this high-dividend stock a…

Read more »

Early retirement handwritten in a note
Dividend Stocks

Retire Early With These 3 Canadian Passive-Income Stocks

Three Canadian passive-income stocks are smart choices for people with early retirement goals.

Read more »

Businessperson's Hand Putting Coin In Piggybank
Energy Stocks

This 7 Percent Dividend Stock is My Top Pick for Immediate Income

Looking for a solid dividend stock that can provide an immediate income source? Consider this dividend gem now while its…

Read more »

man sitting in front of 3 screens programming
Tech Stocks

Shopify Stock or Microsoft Shares: Better Buy for the AI Revolution?

Shopify (TSX:SHOP) and Microsoft (NASDAQ:MSFT) are two of the most impressive growth stocks to watch, as tech slips further from…

Read more »