The Tax-Free Savings Accounts (TFSA) contributions have risen by $500 for three consecutive years now. They were $6,000 for 2022, $6,500 for 2023, and have risen to $7,000 for 2024. That’s a decent enough amount for TFSA contributions, and you can make it even more impactful by parking it in the right growth stocks.
An insurance company
Intact Financial (TSX:IFC) is the most prominent property and casualty (P&C) insurance provider in Canada and among the largest P&C insurance providers in the United Kingdom. But that leadership status is just one part of its appeal as an investment. It’s also one of the best-growing insurance stocks in Canada.
The price has risen by about 194% in the last 10 years, and with dividends, the number has become far more attractive at 275%. But on their own, the dividends are not compelling enough to make it a solid pick, mostly because of the low 2.1% yield. But it’s a great pick as a growth stock, not just for the pace but the consistency of its growth. It has been growing quite steadily since 2009.
A bank stock
While most people look into Canadian bank stocks for their dividends, National Bank of Canada (TSX:NA) receives more recognition for its growth potential. It’s the best-growing bank stock in Canada, and its value has appreciated by about 125% in the last 10 years, which is miles ahead of the next best growth stock in the banking sector.
It’s also quite resilient. It’s trading just 5% below its post-pandemic peak, while three bank stocks have lost at least a quarter of their market value to the current slump. The only downside of this resilience is that the yield hasn’t been pushed up, though it’s attractive enough at the current level of 4.2%.
An alternative financial company
goeasy (TSX:GSY) is still recovering from the massive 55% slump it experienced after hitting its peak in 2021. The current growth phase has pushed its value up 56% in fewer than four months, and considering its relatively low valuation, the growth phase may continue well into 2024. The stock is still trading at a 25% discount to its 2021 valuation.
Even more promising than its current bout of recovery is the stock’s growth in the decade preceding the pandemic. It rose close to 700% in that period. Assuming it reclaims that accelerated pace, the growth from now on can be substantial. It’s also a great pick for dividends, despite the relatively low 2.3% yield, because of its generous dividend growth.
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Foolish takeaway
The three powerful growth stocks can turn your $7,000 capital into a sizable nest egg for retirement if you hold them long enough and if they continue growing at their current pace. You can enhance the return potential by reinvesting the dividends in the companies, steadily growing the size of your stake.
