Discover the Best TFSA Stocks for a Worry-Free Retirement

Investors may want to consider adding these stocks to their TFSAs on dips moving forward.

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When planning for retirement, investors should consider adding high-quality stocks to their Tax-Free Savings Accounts (TFSAs) that generate interest, dividends or capital gains, absolutely tax free. The income generated from TFSAs does not attract tax implications. Thus, investors can save a sizable nest egg for retirement.

Given the tax advantages for stocks with big potential for capital appreciation, growth stocks tend to be better investments in a TFSA. Here are two such stocks I think investors may want to consider adding to their TFSA on dips moving forward.

Top TFSA stocks to buy: Shopify

Shopify (TSX:SHOP) is one of Canada’s biggest global e-commerce companies. It enables merchants to display, market, manage and sell their products via several sales channels like mobile apps, physical stores, mobile storefronts, etc. 

Shopify merchants can now access the Discovery AI of Alphabet’s Google Cloud. This allows integration of Google’s advanced search technologies on the platform, enabling retailers to enhance customer experience. 

They can now use AI to deliver personalized search results and recommendations to customers when they visit the seller’s website. Furthermore, the software can analyze consumer behavior by taking note of the products they buy, add to their cart, etc. and informing the retailer of their tastes and preferences.   

In early May, Shopify released its financial results for its first quarter, which showed strong financial performance. The company’s gross merchandise values has increased to US$49.6 billion, showing a 15% increase from last year. Its merchant solutions revenue and total revenue have increased to US$1.1 billion and US$1.5 billion, indicating a growth of 31% and 25%, respectively. 

Shopify has also welcomed notable brands on its platform, such as Herschel Supply, Seiko, 7 for All Mankind, and Keen. Furthermore, the organization has partnered up with systems integrators like Cognizant and IBM Consulting to scale the adoption of Shopify Plus across a wider customer base.   

Constellation Software

Based in Toronto, Constellation Software (TSX:CSU) is an international vertical market software company. It makes mission-critical and industry-specific software for both public and private sector firms. 

For the current quarter, this software provider has declared a dividend of $1.35 per share. It will be available to shareholders of record on June 16 and will be disbursed on July 11. 

Moreover, this dividend is supported by strong growth, according to the company’s recently released financial statements. The company saw impressive revenue growth of 34% on a year-over-year basis in the first quarter. Indeed, for a company of Constellation’s size, that’s impressive.

Additionally, recent reports indicate that Perseus Group, a subsidiary of Constellation Software, has completed the acquisition of Winklevoss Technologies. The latter is a renowned provider of defined benefit pension and other post-retirement benefits software. Its clients consist of top global investment consulting firms, plan sponsors, insurance companies, etc. 

This acquisition by Constellation’s Perseus Group will enable the former to further strengthen its presence in the niche software market. As the company continues to provide outsized growth, investors stand to benefit from capital-appreciation upside over the long term.

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.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Alphabet and Constellation Software. The Motley Fool has a disclosure policy.

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