The Tax-Free Savings Account (TFSA) grew into the most popular registered account in the years since it was introduced in January 2009. It is beloved by Canadian investors for its flexibility, the benefits of tax-free capital gains and income, and the growing cumulative contribution room that now sits at $88,000. This applies for investors who have been eligible to contribute since the TFSA’s inception in 2009.
Today, I want to target two tremendous stocks that you can set and forget for the next 15 years. I’m looking to target stocks that offer a blend of capital growth and income in our hypothetical TFSA. Let’s jump in.
Why I’m stashing this tremendous stock in my TFSA until the late 2030s
goeasy (TSX:GSY) is the first tremendous stock I’d look to snatch up in the first half of September 2023. This Mississauga-based company provides non-prime leasing and lending services under the easyhome, easyfinancial, and LendCare brands to consumers in Canada. Shares of goeasy have dropped 6.2% month over month as of close on Wednesday, September 6. However, the TSX stock is still up 16% so far in 2023. Investors can see more of its recent and past performance with the interactive price chart below.
Canadian investors should seek exposure to financial stocks that fall outside of the Big Six Canadian banks. Indeed, goeasy offers lending services to portions of the population that may be unable to qualify based on more stringent lending requirements at Canada’s conservative banks. goeasy reported record credit applications in its most recent earnings report and record new customer volume of 41,928.
This company released its second-quarter (Q2) fiscal 2023 earnings on August 9. In Q2 2023, goeasy reported revenue growth of 20% to $303 million. Meanwhile, loan originations increased 6% to $667 million, while its loan portfolio climbed 35% to $3.20 billion.
Shares of this tremendous stock currently possess a favourable price-to-earnings (P/E) ratio of 11. Moreover, goeasy offers a quarterly dividend of $0.96 per share. That represents a 3.1% yield. goeasy has delivered nine straight years of dividend growth. That means this impressive growth stock is also a Dividend Aristocrat. goeasy can deliver big capital growth and consistent income for our TFSA over the next decade and a half.
Bet on future TSX royalty with this tremendous stock in 2023
Fortis (TSX:FTS) is the second tremendous stock I’d look to hold in our TFSA for the long haul. This St. John’s-based electric and gas utility company operates in Canada, the United States, and the Caribbean. Its shares have dipped 2.6% month over month. Meanwhile, this utility stock is down 5.2% in the year-to-date period.
The company unveiled its Q2 fiscal 2023 earnings on August 2. Fortis reported adjusted net earnings of $302 million, or adjusted diluted earnings per share (EPS) of $0.62 — up from $272 million, or $0.57 per share, in the previous year. Moreover, its aggressive $4.3 billion capital plan has expended $2.0 billion so far in the first half of fiscal 2023.
That capital plan aims to grow Fortis’s rate base from $34.1 billion in 2022 to $46.1 billion by 2027. That would translate to a five-year compound annual growth rate (CAGR) of 6.2%. This, in turn, is designed to support annual dividend growth between 4% and 6% through to the end of the capital plan.
Fortis currently offers a quarterly dividend of $0.565 per share, which represents a solid 4.3% yield. This tremendous stock has achieved 49 consecutive years of dividend growth. A stock needs to deliver 50 straight years of income growth to qualify as a Dividend King. That means Fortis is mere months away from being crowned as the second dividend royalty on the TSX. This is a stock you can trust for the long haul in your TFSA.
