Investors with a Tax-Free Savings Account (TFSA) can greatly benefit from buying growth stocks. This is because long-term capital appreciation within a TFSA isn’t taxed. Thus, a TFSA provides tax-advantaged growth — something that is increasingly hard to come by these days.
For those looking to load up their TFSA but don’t know where to start, here are three Canadian stocks to consider right now.
Restaurant Brands
Restaurant Brands (TSX:QSR) is a global quick-service restaurant holding organization headquartered in Canada. It mainly operates through four segments: Burger King, Tim Hortons, Firehouse Subs, and Popeyes Louisiana Kitchen.
As per latest reports, this company has declared a dividend of $0.75/share for the current quarter. This takes the payout ratio to 65.63% and the dividend yield to 2.9%. The ex-dividend date was June 21, and payment will be disbursed on July 6.
Restaurant Brands reported strong growth in the first quarter (Q1) 2023. The company’s net earnings increased to US$277 million from Q1 2022’s US$270 million. Moreover, system-wide sales had a year-over-year growth of 14.75%, adjusted earnings before interest, taxes, depreciation, and amortization of 15.6% and adjusted diluted earnings per share of 22.1%.
Over the long term, I anticipate these trends to continue. Restaurant Brands remains my largest holding for a reason.
Fortis
Fortis (TSX:FTS) is a Canadian electricity and gas utilities operator, which has key markets in the United States and the Caribbean nations. For the last quarter, this company declared a dividend worth $0.56/share, indicating a 76.53% payout ratio and 3.9% dividend yield.
Fortis also reported strong growth in its Q1 2023 results. Its net earnings have increased to US$437 million from last year’s US$350 million, taking the net earnings per common share to US$0.91 from US$0.78.
Moreover, as per recent reports, institutional investors own almost 56% of the company’s shares. This shows how positive big money investors are on Fortis’s future performance, which is another big reason investors should consider buying this stock.
Toronto-Dominion Bank
Toronto-Dominion Bank (TSX:TD) is an international financial and banking services provider based in Canada. It mainly operates via three segments: U.S. Retail, Canadian Retail, and Wholesale Banking.
For the ongoing quarter, this company has declared a dividend payment of $0.96. The payment date is July 31, and will be payable to shareholders on record as of July 7. This stock has a payout ratio of 43.79% and a dividend yield of 4.7%.
As per reports dated May 25, 2023, Toronto-Dominion has announced its plan to repurchase 30 million shares. This represents around 1.6% of the outstanding shares as of April 30, 2023. The repurchases will be done as per the stock’s market price at the time of acquisition or at any other price, which will be permitted by the Toronto Stock Exchange.
Bottom Line
These three stocks have stable financials and thus have the capability to provide consistent growth and dividend income over the long term. Those looking to amp up their TFSAs may want to consider adding these stocks. In my view, these are great picks for an Registered Retirement Savings Plan as well. It really depends on how investors are looking to save for retirement and which accounts have room.
