The Ultimate Growth Stocks to Buy With $7,000 Right Now

These two top Canadian stocks have massive growth potential, making them two of the best to buy for your TFSA today.

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When it comes to investing your money in Canada, the Tax-Free Savings Account (TFSA) is one of the best tools to help significantly grow your money. Having the ability to buy high-quality stocks with significant growth potential without having to pay any tax on the gains you make is a substantial opportunity.

Long-term investing is all about trying to maximize the compounded annual growth rate (CAGR) of your portfolio. Therefore, by not having to pay tax on the income you’re generating in your TFSA, you can significantly improve the compounded returns you make.

By now, most investors know that the TFSA contribution limit increased in 2024 to $7,000, giving investors a tonne of opportunity to diversify their cash and buy high-quality Canadian stocks with years of compelling growth potential.

So, with that in mind, if you’re looking for growth stocks to buy today, here are two of the best on the TSX.

A top financial stock with unbelievable growth potential

There’s no question that one of the best growth stocks on the TSX in the last five years, and one that continues to have significant growth potential going forward, is goeasy (TSX:GSY).

goeasy is a specialty finance stock that predominantly offers loans to consumers with below-prime credit ratings. These are generally loans that these consumers can’t get with a typical bank.

This segment of the finance market is less saturated, offering fewer direct competitors, which contributes significantly to goeasy’s growth. Its unique position outside the mainstream banking industry allows goeasy to expand rapidly and consistently. Furthermore, because the loans carry higher risk, they have higher interest rates, which can lead to higher profitability.

On top of the economics of its industry, goeasy has consistently executed its business strategies to near perfection. Its branding and advertising efforts have been pivotal in driving growth in its sector, and the effective management of its loan book, maintaining stable and manageable levels of delinquent loans, has resulted in returns on equity that significantly outpace those of traditional banks.

Therefore, with goeasy having an impressive track record of success and being only a $2.9 billion stock, it still has tremendous room to grow. In fact, this year analysts expect its revenue will grow another 19%, and more importantly its normalized earnings per share (EPS) will grow another 18%.

Not to mention, over the past five years, its revenue has grown at a CAGR of 19.8%, and its normalized EPS has grown at a CAGR of 31.9%.

So, if you’re looking for a high-quality growth stock to buy for your TFSA and hold for years, there’s no question that goeasy is one of the top picks to consider.

A micro-cap stock to buy with massive growth potential

In addition to goeasy, another impressive growth stock to consider today is VerticalScope Holdings (TSX:FORA).

VerticalScope is up more than 60% year to date as its industry continues to recover. Furthermore, the stock got a massive boost from Reddit’s IPO and the valuation that the massive U.S. technology stock received.

VerticalScope operates a cloud-based platform connecting users across hundreds of its niche online communities, like forums and blogs. This setup allows the company to generate revenue from its communities through targeted advertising and e-commerce, effectively tapping into the specific needs and interests of each community, which enhances advertising and sales success.

The business model shares similarities with Reddit, which explains the significant boost VerticalScope received following Reddit’s IPO. Additionally, there’s potential for further revenue generation as VerticalScope explores selling its content to AI companies, which need as much data as possible to enhance their AI models with diverse communication styles and subject matter expertise.

Therefore, it’s no surprise that all six analysts covering VerticalScope give it a buy rating, and its average analyst target price of $10.13 is a roughly 30% premium to its current trading price.

So, with digital advertising and e-commerce now appearing to be recovering after declining the last few years as the economy faced increased headwinds and now more opportunities for VerticalScope to monetize its data and content, it’s certainly one of the best growth stocks to consider buying for your TFSA today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa has positions in goeasy. The Motley Fool has positions in and recommends VerticalScope. The Motley Fool has a disclosure policy.

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