It may be safe to assume that everyone would like to be comfortable in retirement. However, for many, even thinking about how to do that is an impossible task. Thankfully, everyone can achieve the comfortable retirement they desire by investing in the stock market. In addition, by creating a Tax-Free Savings Account (TFSA), investors could help speed up their way to achieving their goals.
Although it won’t happen overnight, being consistent with your investment activities could help you eventually achieve that comfortable retirement you desire. In this article, I’ll discuss three stocks that investors should buy in their TFSA to help them retire well.
Choose this stock to grow your nest egg
Constellation Software (TSX: CSU) is the first stock that Canadians should consider buying in their TFSAs if they wish to retire well. For those that are unfamiliar, this company acquires vertical market software (VMS) businesses. Upon acquisition, Constellation Software will then provide the coaching and resources necessary to turn those acquisitions into exceptional business units.
For much of its history, Constellation Software has focused on small- and medium-sized VMS businesses. However, since 2021, it has begun to target large VMS businesses for acquisition. It’s unclear how this new strategy will affect its stock over the long run; however, if history can tell us anything, I’d be very confident in Constellation Software’s new direction. Since its initial public offering, Constellation Software stock has gained nearly 15,300%. Over the past year, this stock has generated 37% in returns.
Accumulating shares of this stock can give you sustainable passive income
In addition to a growth stock like Constellation Software, it would be a good idea to begin accumulating shares of solid dividend companies. Over time, these positions could help investors retire well because of the passive income they can generate. If I could only invest in one dividend stock today, it would be Fortis (TSX: FTS). This company provides regulated gas and electric utilities to more than three million customers across Canada, the United States, and the Caribbean.
Fortis has made a name for itself on the public markets because of its long history of increasing its dividend distribution. A Canadian Dividend Aristocrat, Fortis has raised its dividend in each of the past 49 years. The company has already stated its plans to continue doing so through to 2027 at a rate of 4% to 6%. I’m very confident that Fortis will eventually announce future plans to raise its dividend even further past that year.
This stock can give you a bit of both worlds
If you’re not completely set on buying shares of companies that specialize in growth or dividends, then don’t worry. You can also find great companies that offer both to investors. Brookfield Renewable (TSX: BEP.UN) is a great example of this.
If you haven’t heard of this company before, you should know that it’s one of the world’s largest producers of renewable utilities. At the end of last year, Brookfield Renewable stated that it has a generation capacity of 25 gigawatts (GW). The company also has another 110 GW of generation capacity along various stages of development.
Since inception, Brookfield Renewable stock has generated an average annual return of 15%. In addition, the company has increased its dividend distribution in each of the past 11 years at a rate of 6%. Those are numbers that are sure to persuade many potential investors.
