Choosing the right stocks for your Tax-Free Savings Account (TFSA) is a different process for different kinds of investors. Investors interested in a healthy passive-income stream focus on generous and sustainable dividend stocks.
While investors trying to build a sizable nest egg may lean towards the grower. Some investors try to attain a healthy balance of the two different things. However, if you lean more towards growth and are looking for the right stocks to buy with your 2025 contribution room, three stocks are worth watching.
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A space company
MDA Space (TSX: MDA) is among the oldest corporate Canadian space domain players. It started in 1969 as an engineering company for local talent. But in just three years, it was contributing to Canada’s space events and was part of the development of Anik A, the first domestic communications satellite in geostationary orbit.
So, space has been the focus of this company almost since the beginning. It has been part of over 450 space missions over the course of decades and multiple breakthroughs.
The MDA stock (and the company’s status as a publicly traded entity) is relatively new. It joined the market in 2021, and thanks to the timing of its entry, the stock mostly remained bearish until mid-2023, when it actually started rising. It rose about 150% in 2024 alone, and if it can keep this pace up, the stock can be a significant addition to your TFSA portfolio and your overall retirement nest egg.
An AI company
Artificial intelligence (AI) is all the rage, but AI companies in Canada are not offering performances and returns as promising as those across the border. However, there are still a handful of really promising picks, including POET Technologies (TSXV: PTK).
It’s an AI hardware company, but unlike traditional semiconductor giants like Nvidia thriving off the AI boom, POET has a different focus. The company is leveraging its expertise in photonics (using light for digital communication) to transform the AI computing power paradigm.
For now, it’s merely a promising prospect. The company is working hand in hand with an AI venture in the U.S. and is being recognized as a major innovator in the AI domain. That was enough to shoot the stock to incredible heights (437% growth in just 2024). And when the company’s venture starts showing quantifiable results, the development may accelerate even further.
An energy company
TerraVest Industries (TSX: TVK) is simply part of the energy sector because many of its products are exclusively for energy companies. But it’s a manufacturer that creates a wide range of products for multiple markets, including energy. It’s now gaining recognition as a leader in the home heating industry.
The company’s “differentiation” from the sector is also evident from its performance compared to energy stocks. The stock has been powerfully bullish even when the rest of the energy sector is plateauing. This resulted in a 187% stock growth in 2024, when the energy index gained 12%. The stock also pays dividends, but the yield pales against its growth potential.
Foolish takeaway
The three companies have offered exceptional growth in the 12 months and will likely continue to do so in the next 12 months as well. That can give a significant boost to your TFSA portfolio, making them compelling picks and the right places to stash your 2025 TFSA contribution.
