5 Canadian Stocks to Buy and Hold Forever in Your TFSA

Investing in stocks is not always about timing but holding as well. Here are five stocks that you can buy the dip on and hold forever.

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Several growth and dividend stocks with strong fundamentals and secular growth trends are trading near their lows. It is an opportunity to pick up these value buys and hold them forever in your Tax-Free Savings Account (TFSA). They could double your money in the medium term or grow it 10-fold in the long term, turning $7,000 into $70,000. 

Growth stocks near their 52-week low

Magna International (TSX:MG) and BlackBerry (TSX:BB) stocks are trading closer to their 52-week low. While the business and economic conditions have not been favourable for the two in the last few years, their secular growth trends remain unaffected. 

The auto components maker Magna has been expanding in major automotive markets to tap the electric vehicle (EV) trend. However, supply chain bottlenecks and the reduced buying power of consumers have postponed EV growth. The company is optimistic about three megatrends: electrification, battery enclosures, and active safety. 

As these are new launches, the engineering and labour cost is high. It expects these trends to generate profits from 2026 onwards as operational efficiency improves. 

If you buy at the dip, you could benefit from a 30% recovery rally as interest rate cuts improve demand. Moreover, you can lock in a 3.8% dividend yield. Note: Magna has been growing its dividend at an average annual rate of 11% for the past 14 years and is expected to continue this trend. 

Like Magna, BlackBerry has a secular growth trend of EVs, robotics, and the Internet of Things (IoT). The 5G rollout has set the stage for intelligent machines that can communicate with each other in a secure network. The work has begun on the tech front. Companies like Advanced Micro Devices have chosen BlackBerry’s technology for robotics. It shows that BlackBerry’s tech has demand and is waiting for the inflection point. When that comes, this stock could grow multiple folds, making up for years of negative returns in a few months.  

Dividend stocks trading at a discount of over 30%

Stocks of BCE (TSX:BCE) and Slate Grocery REIT (TSX:SGR.UN) are down 39% and 33.5% from their April 2022 high. They have been in a downtrend for over two years due to rising interest rates. These stocks are likely to jump once rate cuts begin as that will reduce their interest burden, which is now hurting their profits.

In BCE’s case, there will also be a showdown with the telecom regulator in May. The regulator has asked BCE to share its fibre network with competitors at a discounted price by May. It is unacceptable to the telco. BCE is fighting this decision as it reduces the incentive to spend billions on building infrastructure. BCE shareholders have already priced in the worst outcome, limiting its downside. Hence, the stock is trading at its 10-year low, allowing you to lock in an 8.95% annual yield. 

The +100% dividend-payout ratio concerns risk-averse investors who are banking on BCE for their retirement passive income. However, the telco is unlikely to cut dividends even if the regulatory environment becomes unfavourable. The ongoing restructuring and rate cuts could bring cost savings. In the worst-case scenario, BCE might pause dividend growth for the next three to five years until it finds new profit-making opportunities.

Slate Grocery REIT could benefit from a recovery rally as property prices return to an upward trajectory when rate cuts begin. The REIT has retail stores in the United States and is drawing stable cash flow. However, its stock price is affected by the fair market value of the REIT’s property portfolio. A recovery in the real estate market could drive its unit price. 

Power Corporation of Canada 

While the above stocks are opportunistic buys, Power Corporation of Canada (TSX:POW) is an evergreen buy with range-bound volatility and a 6% dividend yield. The financial holding company has no direct risks, as it earns dividends from Great-West Life Co and IGM Financial. POW can give you exposure to a range of financial services such as life insurance, pension, retirement plans, private equity, and wealth management. 

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 Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Advanced Micro Devices, Magna International, and Slate Grocery REIT. The Motley Fool has a disclosure policy.

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