Registered accounts like the Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP) are great tools to help build wealth and peace of mind for retirement.
When you save or defer tax, you can intensify the ability of your investments to compound over time. Saving tax and reinvesting the proceeds is a great way to accelerate your returns. Accelerating your returns is a great way to fast track retirement goals and dreams!
If you are looking for some TFSA stocks that can make your dream retirement a reality, here are three to look at buying today.
Everything you want for a long-term TFSA stock
Colliers International Group (TSX:CIGI) is a great stock to buy inside a TFSA for retirement. Colliers has a lot of the factors you want in a long-term compounding hold.
Firstly, it has a great business franchise. The Colliers brand is gaining momentum around the globe.
Secondly, Colliers has an excellent record of creating value for shareholders. Its stock has earned shareholders an 11,117% total return over the past 20 years. That is a 16%-plus compounded annual growth rate.
The great news is that management continues to target similar returns going forward. Management has a high incentive to deliver strong returns because they are also large shareholders. If the company (and stock) succeed, they will as well.
Lastly, Colliers is larger and more diversified than ever. Now over 70% of its revenues come from recurring revenues (like from asset management, property management, debt servicing, and project management). The company has all the ingredients to continue making great outcomes for shareholders in the coming decades.
An industrial stock delivering strong returns
Another stock ideal for a TFSA is TerraVest Industries (TSX:TVK). Like Colliers, TerraVest has delivered some excellent results. Its stock has earned a 1,549% return in the past 10 years. That is a 32% compounded annual growth rate!
TerraVest operates a portfolio of relatively bland industrial companies that include tank manufacturing, boiler and heater sales, and energy services. It’s true competency is its ability to smartly manage and deploy capital.
TerraVest buys these boring industrial companies at attractive valuations. It uses scale and a larger distribution channel to unlock cost advantages and grow sales.
It has no shortage of small businesses it can acquire. Likewise, with a young CEO and a highly invested executive team, TerraVest has a great incentive structure to keep rewarding shareholders.
A small cap TFSA stock with big potential
A final TFSA stock ideal for building lasting wealth is VitalHub (TSX:VHI). It only has a market cap of $416 million. Given its smaller size, VitalHub has a substantial growth opportunity in the years ahead.
VitalHub provides patient flow, patient coordination, and systems automation software for the healthcare industry. Healthcare systems are persistently stressed with too much demand and not enough capacity.
VitalHub’s services help alleviate many of these problems. Not only do they unlock efficiency, but they also improve patient outcomes.
VitalHub has used several smart acquisitions to grow its service portfolio and expand its geogprahic reach. The company has a strong balance sheet to help keep this going.
Its stock is up 104% year-to-date and 447% in the past five years. While this company is small, it has large, uncapped potential inside a TFSA.
