TFSA: 4 Canadian Stocks to Buy and Hold Forever

These Canadian stocks could help TFSA investors generate solid tax-free capital gains and dividends.

| More on:

Image source: Getty Images

Shares of fundamentally strong companies consistently outperform broader markets over time. Additionally, investing in such stocks through a TFSA (Tax-Free Savings Account) can amplify overall returns. This is because capital gains and dividends are not taxed in a TFSA, providing a significant boost to long-term returns.

Against this background, here are four Canadian stocks to buy and hold for the long term. These stocks have solid growth prospects and will diversify your TFSA portfolio. 

TFSA stock #1

The first stock is from the financial services sector. Investors could consider adding goeasy (TSX:GSY) to their TFSA portfolio within this sector. The company provides lending services to subprime borrowers and benefits from its strong competitive positioning, large addressable market, resilience of its business model, and ability to manage credit risk. 

Its revenue and earnings have a five-year compound annual growth rate (CAGR) of 19.8% and 31.9%, respectively. Thanks to its growing earnings base, the company consistently increases its dividend at a rapid pace and is part of the S&P/TSX Canadian Dividend Aristocrats Index

goeasy stock has gained nearly 313% in five years. This rally in its shares will likely be sustained, driven by its higher loan originations, geographical expansion, diversified funding sources, and steady credit performance. Moreover, the goeasy will likely enhance shareholders’ value through higher dividend payments. 

TFSA stock #2

Next up is the leading Canadian tech company, Shopify (TSX:SHOP). This e-commerce company is poised to benefit from the ongoing shift in selling models towards omnichannel platforms. The company’s multi-channel sales platform and key offerings, including payment processing, shipping solutions, and marketing tools, position it well to capitalize on the digital shift. 

The secular tailwinds will likely drive higher adoption of its products, including Shopify Payments and Shopify Capital. Moreover, the increase in gross merchandise volumes and higher penetration of Shopify Payments will likely boost its financials. 

Moreover, Shopify’s focus on cost-reduction measures, integration of artificial intelligence (AI) technology in its products, and shift towards an asset-light business model augur well for long-term growth. 

TFSA stock #3

TFSA investors could consider adding Dollarama (TSX:DOL) stock from the retail space. Despite operating a defensive business, shares of this discount retailer have consistently outperformed the broader markets due to its ability to grow sales and earnings rapidly in all market conditions. 

Dollarama sells a wide variety of everyday essentials at low and fixed price points. This value pricing strategy drives traffic and, in turn, its financials and share price. 

The momentum in its business will likely be sustained as Dollarama grows its sore base, adds more products, and sticks to its value pricing approach. Moreover, its focus on direct sourcing and improving efficiency will likely boost its earnings and dividend payments. 

TFSA stock #4

The final stock on this list is from the Canadian energy sector. TFSA investors could consider Canadian Natural Resources (TSX:CNQ) stock for its ability to deliver solid capital gains and focus on returning higher dividends to its shareholders. 

This Canadian blue-chip stock has appreciated more than 269% in five years, delivering an impressive average annualized return of 29.8%. Moreover, it has consistently increased its dividend for 24 years at a remarkable CAGR of 21%. 

The oil and gas company could continue to deliver solid financials driven by its diversified cash flows, high-value reserves, and long-life assets. Moreover, benefits from low maintenance capital requirements, strong balance sheets, and strategic acquisitions augur well for long-term growth. 

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Canadian Natural Resources. The Motley Fool has a disclosure policy.

More on Investing

Increasing yield
Dividend Stocks

2 High-Yield Dividend Stocks to Buy as They Bounce

These top dividend stocks still look cheap.

Read more »

Value for money

3 Top Value Stocks to Buy in May

Given their healthy growth potential and attractive valuation, I am bullish on these three value stocks.

Read more »

growing plant shoots on stacked coins

TFSA Investors: 2 Stocks That Could Turn $500 Into $1,500 by 2030

Here's why holding growth stocks such as Docebo and Lululemon might be a good idea for TFSA investors in 2024.

Read more »

ETF chart stocks
Dividend Stocks

The Best Canadian ETFs $100 Can Buy on the TSX Today

These three ETFs are the perfect options for investors looking for growth, income, and a base to hold long term.

Read more »

money cash dividends
Dividend Stocks

TFSA Pension: How to Earn $4,750 Per Year in Tax-Free Income

Here's why the TFSA should be an integral part of your retirement savings strategy.

Read more »


TFSA Value Stocks: 2 Laggards That Could Come Soaring Back

Spin Master (TSX:TOY) and another fallen stock could be great buys on weakness.

Read more »

Man considering whether to sell or buy
Dividend Stocks

TELUS Stock: Buy, Sell, or Hold?

TELUS (TSX:T) stock has seen operational improvements but still remains down on a year-over-year basis. So, is it worth it?

Read more »

Aircraft wing plane
Stocks for Beginners

Bombardier Stock Is up 16% After Earnings: What Investors Need to Know

Bombardier’s continued focus on high-margin service revenue, expansion of manufacturing capabilities, and solid order book could help its stock continue…

Read more »