TFSA Alert: Top Stocks to Safeguard Your Retirement

Are you looking for stocks to hold in a TFSA? Here are three top picks!

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In my opinion, a Tax-Free Savings Account may be the most important investment account a Canadian can open. That’s because it allows you to generate as much you can in returns without having to worry about paying taxes down the line. That could allow you to snowball your account much faster. It’s important to note that Canadians can’t claim any losses they incur in a TFSA. Therefore, it’s important to be very prudent when choosing stocks to hold in one of these accounts.

In this article, I’ll discuss three top stocks that investors can choose to safeguard their retirement.

Start with this excellent company

When it comes to safer stocks to invest in, I look for companies that operate businesses that are relatively stable. This can be very subjective, depending on what you deem to be a stable business. In my opinion, a stable business is one that relies on recurring revenue. Fortis (TSX:FTS) would be an excellent example of that. This company provides regulated gas and electric utilities to more than three million customers across Canada, the United States, and the Caribbean.

Because Fortis relies on recurring revenue, it can more easily predict what its cash flow could look like in the future. That allows the company to plan its dividend distributions years in advance. This has translated into a 49-year dividend-growth streak, the second-longest active streak of its kind in Canada. Fortis has already announced its plans to continue raising its dividend through to 2027 at a rate of 4-6%.

Consider investing in grocery companies

Although grocery companies don’t rely on recurring revenue per se, it’s a fact that consumers will continue to visit their local grocery stores for years to come. It’s essential that humans obtain nutrition and grocery stores tend to be the easiest place to get food. That simple fact is the investment thesis behind grocery store stocks. Of all the grocery stores in Canada, Metro (TSX:MRU) poses the most appealing opportunity, in my opinion.

This company operates 975 grocery stores across the country, with a strong focus on Quebec and Ontario. In 2022, the company reported approximately $18.9 billion in revenue, making it a leader in the grocery industry. Like Fortis, Metro has been able to take advantage of its stable revenue streams and translated that into a 26-year dividend-growth streak. Over the past five years, Metro stock has gained nearly 70%.

Invest in this Canadian behemoth

Finally, investors should consider buying shares of Telus (TSX:T) stock. This is one of the largest players in the Canadian telecom industry. It should be noted that Telus operates the largest telecom network, providing coverage to 99% of the Canadian population. Although Telus has made a name for itself through its work in the telecom space, it should be noted that the company has made significant moves in the telehealth industry. By offering MyCare, patients can seek out medical professionals from the comfort of their own homes.

Another excellent company, Telus has managed to translate its steady revenue streams into a 17-year dividend-growth streak. By investing in this company, I feel confident that Canadians could grow their TFSA for years to come.

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 Jed Lloren has positions in Fortis. The Motley Fool recommends Fortis and TELUS. The Motley Fool has a disclosure policy.

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