Investment frequencies differ from investor to investor. Some investors stash any savings in the right stocks, while others grow their savings to a sizable sum before making a substantial enough investment. Both strategies have their pros and cons.
For Tax-Free Savings Account (TFSA) portfolios, the contributions serve as an informal cap on how much you can invest in a year. For 2023, it’s $6,500 and expected to grow to $7,000 in the coming year.
However, if you haven’t invested your TFSA contributions yet and still have $6,500 in the capital you can stash away in the right investments, three top TSX stocks should be on your radar.
A waste management company
Waste Connections (TSX: WCN) is one of the largest publicly traded solid waste collection and disposal companies in North America. It offers various residential and commercial waste management services, including hazardous and special waste. The footprint of the company’s operations is massive, spanning over 44 U.S. states and six Canadian provinces. The customer portfolio is eight million strong.
It recently signed a deal to acquire another publicly traded waste management company focusing on Canada’s energy sector. The Waste Connection stock has been a compelling grower since its inception and has shown decent resilience during COVID-19.
It rose 86% in the last five years alone, and if we add the dividends, the total returns rise to about 92%. At that pace, the stock may double its investors’ capital every six years.
An insurance company
Another leader you can invest in with your TFSA contributions is Intact Financial (TSX: IFC), the largest property and casualty (P&C) insurance company in Canada with a solid presence in the U.K. and Ireland. There are about 10 brands/business segments under the IFC banner, including RSA, one of the largest insurance companies in the U.K.
One major attraction of Intact Financial (as stock) is that, unlike other insurance giants in Canada, it has exhibited compelling growth in the last 10 years, and the pace has stayed the same. It more than doubled its investor’s capital in the last five years alone, with about 112% price appreciation. It’s also a Dividend Aristocrat currently offering a 2% yield.
An information giant
Thomson Reuters (TSX: TRI) has built a stable and thriving business around information. It has its roots in print news, which now represents a relatively small part of the overall business.
The company makes a lot of its money by offering specialized services and tools to specific industries, like legal and corporate. It’s also positioning itself as a strong player in the field of artificial intelligence (AI), which gives you a way to gain exposure to AI if you are not keen on tech stocks.
The stock has mostly gone up since 2012, but the pace really accelerated after 2017. It rose over 168% in the last five years alone without raising its valuation to dangerous levels. It’s also a well-established Aristocrat with a 1% yield, but its chief attraction is its growth potential. At its current pace, it may grow its investors’ capital by at least 300% in a decade.
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Foolish takeaway
All three companies can be held in your TFSA stocks for years, even decades. They may not help you generate a sizable passive income, considering their modest yields and the limitation associated with TFSA contributions for a year. But the capital-appreciation potential is quite significant, and given enough time, it may turn $6,500 this year into a sizable nest egg.
