The FHSA (First Home Savings Account) could be a game changer for those prospective first-time homebuyers who haven’t quite been able to save enough for that down payment. Undoubtedly, housing prices across Canada have gotten out of hand. Though they may seem out of reach (it also depends on where you live), I view the FHSA as a tool that could bring homeownership from a pipedream to a reality in as little as five to 10 years.
We won’t go into depth on the FHSA in this piece. You should look up the limits, eligibility criteria, and more on the Canada Revenue Agency (CRA) website or check in with your bank if it offers the FHSA yet. If your bank doesn’t yet have the FHSA ready to go, do not fret. It’ll likely be available at some point later this year.
For now, it may be worth considering what you may wish to invest in it. Whether you’re hoping to buy your first home in five years or 10 years from now, the FHSA can be a profoundly powerful tool when used wisely such that the effects of compounding can be unlocked.
Value stocks with reliable track records of earnings growth are what I’d target for an FHSA right here. When it comes to the FHSA, you should seek steady growth without having to pay up a hefty premium to get in. Without further ado, here are two of my finest ideas and candidates I’d consider for an FHSA.
Alimentation Couche-Tard: A prudent value creator
Alimentation Couche-Tard (TSX:ATD) is more than just a retailer; it’s a stable earnings grower with some of the best managers in the business. The convenience store giant behind Circle K boasts management that behaves like owners of a family business.
In that regard, they’ll treat every dollar they plan to invest shrewdly. I admire the discipline, talents, and track record of chief executive officer Brian Hannasch and his team. They didn’t get ahead of themselves when times were good, and everybody wanted them to make a deal with their growing cash pile. These days, credit is harder to come by, and the firms that make cold, hard cash are the ones that could continue to be rewarded by Wall and Bay Street, especially if rates ascend further from here.
As the Canadian recession moves in, Couche-Tard may find itself in a spot to go bargain hunting. While Couche-Tard has made small- to medium-sized deals over the past year (the firm inked a deal to buy 112 gas stations in the states more than a month ago), there’s still room for a mega deal.
I think the odds are high that the next big Couche deal will be rewarded with applause from investors. That’s just how impressive the firm’s merger and acquisition history is! Couche-Tard is a synergy-driving master, thanks to its ability to put in extra due diligence well prior to a deal being struck.
At around 17.5 times forward price to earnings, I view ATD stock as a great value stock to stash in any portfolio for the next five years or more.
The bottom line for FHSA investors
It’s companies like Couche-Tard that may help you grow your FHSA over the coming years. Smart investing can help turn the dream of homeownership into a reality.
