The First Home Savings Account (FHSA) is a new type of investment account that was released earlier this year. Using one of these accounts, Canadians are able to combine the benefits of a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP). In my opinion, this is the best kind of investment available to Canadians today, because of the fact it draws inspiration from both the TFSA and RRSP.
In this article, I’ll discuss three top stocks to consider holding in one of these accounts.
This is one of the best Canadian stocks
When it comes to Canadian stocks, very few offer investment opportunities as attractive as the one that Constellation Software (TSX:CSU) offers. This may very well be one of the greatest Canadian stocks ever and very few Canadians actually know it exists. For those that aren’t familiar with Constellation Software, know that it’s a tech conglomerate. It acquires vertical market software businesses and provides the coaching and resources necessary to turn those acquisitions into exceptional business units.
Since its initial public offering (IPO) in 2006, Constellation Software stock has gained more than 14,500%. To put that into perspective, an initial investment of $10,000 made at the time of Constellation Software’s IPO would be worth more than $1 million today. Still led by its founder Mark Leonard, I believe Constellation Software stock could still grow strongly over the coming years. Over the past year, the stock has gained more than 34%.
An undervalued company worth holding in a TFSA
Alimentation Couche-Tard (TSX:ATD) is a stock that I would recommend to any investor hoping to achieve steady growth over the next decade. I think this stock is undervalued by individual investors, because it doesn’t have the most exciting business. If you’re not familiar with this company, you should know that it’s a very large player in the global convenience store industry. With more than 14,000 locations around the world, Alimentation Couche-Tard operates under several banners like Mac’s, Daisy Mart, On the Run, and more.
Since its IPO in December 1999, Alimentation Couche-Tard stock has gained more than 14,100%. Over the past five years, this stock has gained more than 137%. That performance challenges some of the most exciting tech stocks over the same period. Alimentation Couche-Tard is also an interesting stock because of its dividend history. Since 2012, the company has raised its dividend almost 10-fold. That represents a compound annual growth rate of about 25%.
I think this stock still has a lot of room for growth
Finally, I think FHSA investors should consider buying shares of Shopify (TSX:SHOP). This company is one of the largest players in the global e-commerce industry. In my opinion, Shopify stands out among its peers because of the breadth of its service offerings. Shopify is capable of catering to everyone from the first-time entrepreneur to large-cap enterprises.
Shopify has been in the spotlight recently for all of the wrong reasons. As of this writing, Shopify stock sits about 63% lower than it’s all-time high. That can be attributed to a fall of more than 80% from November 2021 to October 2022. Despite those struggles, Shopify’s business continues to grow steadily. In its most recent earnings presentation, Shopify reported US$116 million in recurring revenue. That represents a CAGR of 29% over the past five years. As e-commerce continues to grow, I expect Shopify’s business to continue thriving. I think its stock should follow.
