The Tax-Free Savings Account (TFSA) offers Canadian investors a unique benefit by shielding their investment gains from taxes, making it a perfect vehicle for holding high-quality stocks for the long term. While sometimes you may get lucky and witness a sudden spike in a stock price, the best way to build wealth could be to follow the Foolish Investment Philosophy of buying and holding high-quality stocks forever that could deliver consistent returns over time. By doing so, you can maximize the benefits of tax-free growth and multiply your hard-earned savings.
In this article, I’ll highlight two of the best Canadian stocks that you can buy and hold forever in your TFSA to see your savings grow faster than you may imagine.
Celestica stock
The first Canadian stock that I would recommend for long-term TFSA investors is Celestica (TSX: CLS). This Toronto-headquartered primarily focuses on designing and manufacturing of innovative electronic products for businesses across the world. It currently has a market cap of $9.1 billion as its stock trades at $76.63 per share after rallying by 97.4% so far in 2024.
Remarkably, Celestica stock is rallying for the fourth consecutive year in 2024. Over the last five years combined, the stock has delivered an eye-popping 775% positive return, supported by its ability to continue growing irrespective of short-term economic challenges.
In the 12 months ended in March 2024, Celestica’s revenue rose 10.8% YoY (year over year) to US$8.3 billion with the help of strong demand from many of its major customers. More importantly, its adjusted earnings in these four quarters surged by 41.7% YoY to US$2.82 per share, reflecting its focus on operational efficiency and improving profitability even amid the challenging macroeconomic environment.
Recent improvements in its financial growth trends, the robust demand for Celestica’s services, and its focus on strategic acquisitions brighten its long-term growth outlook, making it an attractive Canadian stock to buy now and hold in your TFSA for the long term.
TFI International stock
TFI International (TSX: TFII) could be another strong buy-and-hold forever stock for TFSA investors. The Saint-Laurent-based logistics and transportation company currently has a market cap of $15.8 billion as its stock trades at $187.63 per share after rallying by over 15% in the last six months. With this, TFII stock has inched up by 367% in the last five years.
In five years between 2018 and 2023, TFI International’s revenue grew positively by 90.2%, while its adjusted earnings during the same period climbed by around 126% despite facing the pandemic-driven operational challenges in between. Although lower volumes associated with freight and reduced gains on asset sales pressured its operating income in the first quarter of 2024, expectations of an improved economic environment after the recent rate cut in Canada could boost its revenue and operating income in the coming quarters.
Moreover, TFI International’s strong balance sheet and consistent focus on new quality acquisitions strengthen its long-term fundamental outlook, which will likely help its share prices continue soaring in the years to come.
