The Tax-Free Savings Account (TFSA) was introduced by the Stephen Harper-led Conservative government in January 2009. This registered account was designed to give Canadians another investment vehicle to complement the Registered Retirement Savings Plan (RRSP). The TFSA offers much more flexibility, allowing investors to withdraw from their potential capital gains without paying any tax penalty. Moreover, all capital and income gains in this account are entirely tax free. In 2023, the annual contribution limit for the TFSA rose to $6,500.
Today, I want to look at three stocks that are worth spending the increase on.
This promising TSX stock is still perfect for your TFSA
Park Lawn (TSX: PLC) is a Toronto-based company that owns and operates cemeteries, crematoriums, and funeral homes in Canada and the United States. Shares of this TSX stock have increased 3.4% month over month as of early afternoon trading on July 17. The stock is still down 8.3% so far in 2023.
The deathcare market is a worthy target for TFSA investors who are on the hunt for long-term growth. North American mortality rates have declined since the end of the COVID-19 pandemic. However, the explosion in the population of seniors in Canada and the United States means we will see more activity in this space. Park Lawn delivered revenue growth of 4.3% to $86.7 million in the first quarter (Q1) of fiscal 2023.
Shares of Park Lawn are trading in favourable value territory relative to its industry peers at the time of this writing. Moreover, TFSA investors can rely on its quarterly dividend of $0.114 per share. That represents a modest 1.8% yield.
Here’s why I’m looking for exposure to automation this decade
ATS (TSX: ATS) is a Cambridge-based company that provides factory automation solutions worldwide. Fortune Business Insights recently valued the global industrial automation market at US$191 billion in 2021. The same report projected that this market could post a compound annual growth rate (CAGR) of 9.8% from 2022 through to 2029. This TSX stock has surged 48% in the year-to-date period.
In Q4 of fiscal 2023, ATS delivered revenue growth of 21% to $730 million. Moreover, adjusted basic earnings per share (EPS) rose to $0.73 compared to $0.60 in the prior year. Order Bookings rose 15% to $737 million, and the company’s Order Backlog climbed 49% to $2.15 billion.
This TSX stock is on track for strong earnings growth going forward. I’m looking to stash this stock in a TFSA in the 2020s and beyond.
Take advantage of crypto’s resurgence in your TFSA with this stock
Hut 8 Mining (TSX: HUT) is a Toronto-based cryptocurrency mining company that operates in North America. The cryptocurrency space was hit hard in 2022. However, it has started to bounce back after strong endorsements in recent months, including from BlackRock chief executive officer Larry Fink. Shares of Hut 8 Mining have jumped 53% over the past month. The stock has soared 353% so far in 2023.
TFSA investors can take advantage of growth spurts in the crypto space with Hut 8 Mining. However, investors should also beware of the volatility in this space.
