Investing in shares of fundamentally strong Canadian companies can help achieve above-average returns over time. Meanwhile, investors can maximize their gains using a Tax-Free Savings Account (TFSA) to invest in stocks. Within a TFSA, investors benefit from tax-free treatment on capital gains, dividends, and interest income, providing a substantial boost to long-term investment returns.
The TFSA contribution limit is $7,000 in 2024, providing ample room for investors to capitalize on high-growth opportunities. Against this backdrop, here are four Canadian stocks worth buying and holding for years within a TFSA.
TFSA stock #1
If you’re looking for a stock to buy and hold forever in your TFSA, goeasy (TSX:GSY) is a fantastic option. This financial services company has an impressive track record of steady, double-digit growth in both sales and earnings. Thanks to its solid financials, goeasy has outperformed the TSX and returned significant cash to its shareholders through higher dividends.
In the past five years, goeasy stock has seen a remarkable gain of about 282%, reflecting a compound annual growth rate (CAGR) of over 30%. This stellar performance is complemented by its strong history of increasing dividends over the last decade.
goeasy’s leadership in the subprime lending market, geographical expansion, diversified funding sources, and steady credit performance position the company well for continued growth. Further, its focus on operational efficiency will support goeasy’s long-term profitability. This, in turn, will drive future dividend payments and its share price.
TFSA stock #2
Shopify (TSX:SHOP) is an excellent stock to capitalize on the digital shift. With its unified commerce solutions, this Canadian tech giant is poised to benefit from the ongoing shift in the selling models towards multi-channel platforms.
Despite the macro headwinds, Shopify consistently grows its gross merchandise volumes and revenues. This shows the resiliency of its business model and demand for its offerings. Further, Shopify’s innovative product offerings, such as Payments and Capital, and the addition of new sales and marketing tools will continue to drive its merchant base, enhance its market share, and support its growth.
Shopify is integrating artificial intelligence (AI) technology in its offerings to drive higher adoption and boost efficiency. Additionally, Shopify’s focus on geographic expansion and transition towards an asset-light business augur well for growth, supporting its share price.
TFSA stock #3
Dollarama (TSX:DOL) stock is a must-have in your TFSA portfolio for dividend, growth, and stability. The discount retailer offers products at low and fixed price points, attracting value-driven customers to its stores and enabling the company to grow its earnings regardless of economic conditions.
Thanks to its profitable growth and steady performance, Dollarama stock consistently generated solid returns and outperformed the broader index. For example, Dollarama stock has appreciated over 160% in the last five years, growing at a CAGR of about 21%. Besides delivering steady growth, the company enhances shareholders’ value through higher dividend payments.
The retailer’s extensive store base, value-pricing strategy, and wide product assortment support its growth. Further, its direct sourcing and focus on improving productivity position it well to deliver profitable growth. This will drive its shares and ensure continued dividend payments.
TFSA stock #4
TFSA investors can bet on Celestica (TSX:CLS) stock to earn stellar returns. Shares of Celestica, a supply chain solutions provider, have rallied about 393% in the last three years. However, Celestica stock has recently witnessed a pullback, providing a buying opportunity for long-term investors.
Celestica is well-positioned to tap into some of the fastest-growing industries, especially artificial intelligence (AI). With the AI market expected to expand significantly in the coming years, Celestica’s exposure to this sector could provide a strong foundation for future growth.
The company’s hyper-scale customers’ significant investments in data centre infrastructure and solid demand for its hardware platform solutions will support its growth. Further, continued strength in its Aerospace and Defense revenue will likely support its growth.
