The Tax Free Saving Account (TFSA) contribution limit is set to increase by $7,000 in 2025. That means it is time to start saving for your next contribution.
Likewise, it is time to start thinking about where to invest the extra contribution. If you are looking for ideas, here are four stocks to add in a TFSA and hold for years ahead.
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A TFSA stock for decades
The first TFSA stock is one that has been in business since 1881. It is Canadian Pacific Kansas City (TSX: CP). After its merger with Kansas City Southern, CPKC might have one of the most enviable networks in North America. Its railroad spans both oceans and across Canada, the U.S., and Mexico.
It has been a challenging year for the railroads. The freight environment has been weak. External factors like strikes and weather have slowed network volumes. Fortunately, CP has delivered some of the best results through this turmoil.
It delivered earnings per share growth in the recent quarter (unlike many peers). The stock has pulled back by 5% in the past month, and it looks like an attractive long-term entry point.
A financial stock with a nice growing dividend
goeasy (TSX: GSY) is another great long-term holding for a TFSA. If you want income, growth, and value, this stock has a little bit of everything. goeasy is one of the largest non-prime lenders in Canada.
Many banks have tightened credit policies, so higher-end consumers are going to the non-prime market. This has been favourable for goeasy. Earnings per share have risen 19% year to date. It still has plenty of levers to keep growing at a high-teens rate for years ahead.
Right now, goeasy yields 2.7%. Its dividend has been growing at the rate of its earnings (around 30% compounded annual growth). This TFSA stock is not expensive trading only at nine times next year’s earnings.
A software stock mimicking its parent
Another TFSA stock for long-term growth is Topicus.com (TSXV: TOI). If you like Constellation Software and its 250 times return, Topicus could be a good alternative for a stock in its early stages.
Topicus is a Constellation spin-out. It’s completing the same vertical market software consolidation strategy. However, it has a focus on Europe (but is expanding horizons in Asia and South America).
Recently, the cadence of acquisitions has accelerated. The company generates a lot of spare cash, so it has plenty of firepower for more growth ahead. Topicus.com is not the cheapest stock, so best to add it to your TFSA when it dips.
Big tailwinds for this TFSA stock
WSP Global (TSX: WSP) is a great TFSA stock for the long term. Nobody talks about this company, but it has become one of the largest consulting, engineering, and project management firms in the world. Its stock is up 182% in the past five years.
WSP has consolidated the engineering sector. In doing so, it has become an expert in a broad mix of fields. It can use its global scale and diverse expertise to capture larger and more complex (and higher margin) projects.
Factors like population growth, climate change, and technology are all raising demand for infrastructure. WSP has the capacity to help manage these risks. It should continue to benefit from growth for the long term. Like Topicus, it isn’t the cheapest stock, but it’s a very high-quality company to hold in a TFSA.
