Top TFSA Stocks to Buy Now for Canadian Investors

Here are two top Canadian growth stocks long-term investors may want to consider adding to their TFSAs right now.

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The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.

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Using a Tax-Free Savings Account (TFSA) is one of the top ways Canadian investors can grow their long-term wealth and set themselves up for an enjoyable and relaxing retirement. No one likes taxes, but we all pay taxes throughout our lifetime. By putting one’s after-tax dollars to work in a TFSA, investors can reap the benefits of tax-free gains in retirement. That’s a big deal, if investors can pick select stocks that are able to outperform the market over extended periods of time.

The following two stocks I’m going to highlight in this piece are each picks I think have the potential to do just that. Let’s dive into why these two particular growth stocks are worth considering for those looking to ramp up the value of their TFSAs over time.

Shopify

Among the most prominent Canadian stocks in the market, Shopify (TSX:SHOP) has proven itself to be one of the best growth stocks in the market since the company went public roughly one decade ago.

Created with Highcharts 11.4.3Shopify PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

As the company’s stock chart above shows, Shopify’s ascent higher has not been steady, by any means. This is also a stock that’s still trading below its post-pandemic high, so there’s plenty of room for the stock to rally from here, if many believe that the same fundamentals that drove the market higher in 2021 are in play today.

I think there are solid fundamental reasons why this stock certainly has the potential to head higher from here. For one, the company’s status as a leading global provider of e-commerce solutions to businesses of all sizes has turned this Canadian tech giant into a global player. Rivalling some of the largest mega-cap tech stocks in this space, there’s a reason why Shopify has garnered an impressive market capitalization of nearly $200 billion.

For those who believe the growth Shopify has seen in its core e-commerce business will continue, as transactions and gross merchandise volume continue to rise over time, this stock is a great way to play this trend. I think investors looking for outsized growth in an environment where valuation multiples could expand further may want to consider this stock given its relative valuation discount to its historical levels (and growth rates that could accelerate over time).

Constellation Software

Another top growth stock I’ve continued to pound the table on for a long time is Constellation Software (TSX:CSU). Indeed, as the company’s stock chart below shows, this has certainly been the right call, with the stock continuing to move higher in a very steady fashion over the long term.

Created with Highcharts 11.4.3Constellation Software PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Of course, the question many investors rightly may ask is whether this growth trend can continue. I think that’s a question that’s harder to answer. However, the company’s valuation premium in the market is one that’s justified in my view.

That’s mostly because Constellation Software’s business model of acquiring and integrating a range of smaller vertical software companies into a growing portfolio is one that’s paid off over time (as its stock chart indicates). Additionally, given the fragmented nature of this market and the thousands of such companies that still exist (with many more popping up each and every year), the market opportunity for Constellation Software only appears to be growing over time.

As the company continues to perform its M&A duties thoughtfully, investors benefit. With one of the best teams in the tech market overseeing this scalable model, this is a company that could have much further to run from here.

I’m of the view that a TFSA holding both stocks can outperform over the long run, and these are perhaps the two best Canadian growth stocks in the market right now.

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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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.

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