5 Canadian Stocks to Hold in Your TFSA For Decades

The TFSA is the perfect place to compound wealth over decades. Don’t pay any tax on these top five growth stocks with big upside ahead!

| More on:
IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT

Image source: Getty Images

If you want to compound investment earnings for long periods (like decades), you need to max out your TFSA (Tax-Free Savings Account). Stocks held in a TFSA are safe from all taxation.

That means your investments and gains can compound without restraint. You are more likely to hit your financial goals faster by using a TFSA. If you are wondering what kind of stocks to hold in a TFSA, here are five top-performing Canadian stocks for the decades ahead.

A transport stock for any TFSA

TFI International (TSX:TFII) has really delivered for long-term shareholders. Its stock is up 320% in the past five years and 688% in the past 10 years. That doesn’t factor in its growing dividend per share either.

TFI is not an exciting business. TFI operates a mix of shipping, logistics, and freight businesses. It has a smart management team of cost-efficient operators. They have also proven wise capital allocators after making 90-plus acquisitions over the past 10 years.

The freight industry is depressed in North America and that is weighing on TFI’s stock. However, that could create some attractive opportunities to add to your TFSA in 2024.

A top real estate stock

Colliers International (TSX:CIGI) is another TFSA stock with some near-term buzz, but long-term potential. It is best known for its global commercial real estate brokerage business. That business has lagged as high interest rates have hampered real estate transaction activity.

However, many don’t recognize over 70% of its earnings now come from recurring revenue businesses. Asset management, property management, and consulting/advisory have become major components at Colliers. This company is very well-positioned, especially if real estate capital markets resume.

This TFSA stock has compounded total returns by a high-teens rate. Its CEO is a major shareholder so incentives to continue to deliver are highly aligned with shareholders.

A software stock with a top-performing parent

Another long-term TFSA stock is Topicus.com (TSXV:TOI). It is a prodigy spin-out of Constellation Software (one of the best-performing tech stocks in Canada). Topicus is a great way to get exposure to a similar business to Constellation, but without having to pay a $3,700 per share price tag.

Topicus acquires niche software businesses across Europe. Given how diverse Europe is, there is a huge market of specialized software businesses it can acquire.

Through a mix of cross-selling and smart product development, Topicus has actually been growing organic revenues even faster than Constellation. It is not the cheapest stock. However, it recently pulled back and could be a good buy if it drops more.

A fast-growing insurance business

Another TFSA stock with long-term upside is Trisura Group (TSX:TSU). It provides specialty insurance products in Canada and the U.S. The risk management solutions provider also has a fronting services business that has grown substantially in the past few years.

This stock is up 450% in the past five years. This was driven by exceptional 40% compounded earnings per share growth. It has a strong return on equity, a low combined ratio, and good potential to keep growing. For a small-cap stock that could keep growing for years, Trisura is an intriguing bet today.

An anchor stock for a TFSA

Canadian Pacific Railway (TSX:CP) is a nice anchor for a TFSA. Railways are very resilient businesses over the long term. After its acquisition of Kansas City Southern, CP has one of the best rail networks in North America. It is the only single network that spans across Mexico, the U.S., and Canada.

This provides CP many levers for growth in the coming years. Management is aiming to double earnings in the next three to four years. It is a pricier railroad in terms of valuation. However, if the company can hit its growth targets, it will be worth holding in the years ahead.

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 Robin Brown has positions in Colliers International Group, Constellation Software, TFI International, Topicus.com, and Trisura Group. The Motley Fool has positions in and recommends Colliers International Group, Topicus.com, and Trisura Group. The Motley Fool recommends Canadian Pacific Kansas City and Constellation Software. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

Target. Stand out from the crowd
Stocks for Beginners

2 No-Brainer Stocks to Buy With $7,000

Got some cash to fill up your TFSA? Here are two stocks that look like good buys on the recent…

Read more »

top TSX stocks to buy
Stocks for Beginners

3 Stocks That Can Help You to Get Richer in 2024

These three stocks have already proven their worth this year, but are set to continue climbing in 2024 and even…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Kinaxis: The AI Stock Investors Are Missing Out On

Kinaxis stock (TSX:KXS) is one AI stock you don't want to miss, with proven results and long-term contracts leading to…

Read more »

telehealth stocks
Tech Stocks

Forget Shopify Stock: 1 Tech Stock to Buy Instead

Shopify stock (TSX:SHOP) plunged by over 20% after earnings guidance for the second quarter came in lower, but this other…

Read more »

A golden egg in a nest
Dividend Stocks

How to Build a Monthly Passive-Income Portfolio in Retirement With Just $7,000

This monthly paying dividend stock is one of the best ways to create a passive income portfolio in retirement. It's…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Stocks for Beginners

3 Soaring Stocks You Can Buy Right Now Before They Surge Even Higher

These three soaring stocks have continued to climb in 2024 but have so much more to give investors moving forward.

Read more »

Economic Turbulence
Stocks for Beginners

Down but Far From Out: 3 TSX Stocks to Buy and Hold Forever

Here are some market leaders that are going through difficult times. They are stocks worth buying and holding.

Read more »

Car, EV, electric vehicle
Stocks for Beginners

The Ultimate EV Stock to Buy With $1,000 Right Now

If you're investing long-term in EV stocks, this company is already seeing massive growth and expects more to come in…

Read more »