The Best Canadian Stocks to Buy and Hold Forever in a TFSA

Investing in Canadian stocks through a Tax-Free Savings Account (TFSA) could be an excellent strategy to create wealth in the long term. This is because your capital gains and dividends are not taxed in a TFSA. As your investments grow tax-free, it can significantly boost your returns over time.

Moreover, investors should add fundamentally strong stocks with solid growth potential to their TFSA portfolio. These stocks are more likely to generate above-average returns, making them perfect candidates for a “buy-and-hold-forever” strategy. Against this background, here are the best Canadian stocks to consider now.

Hammond Power Solutions stock

TFSA investors could buy and hold Hammond Power Solutions (TSX: HPS.A) stock. The company offers dry-type transformers and power-quality products. The company is well-positioned to benefit from rising power demand, increased infrastructure investments, and expanding activity in high-growth sectors like data centres and healthcare.

Hammond Power’s custom solutions are experiencing strong demand, particularly from data centres. Moreover, the company’s steadily growing backlog reflects robust booking momentum, providing a solid foundation for sustainable revenue growth over the coming years. Hammond Power is expanding its manufacturing capacity and pursuing strategic acquisitions to capitalize on this momentum. These efforts will likely drive incremental growth in its power quality and related product lines, reinforcing its long-term growth potential.

TerraVest Industries stock

TerraVest Industries (TSX: TVK) stock could be another solid addition to your TFSA portfolio. The company manufactures home heating products, transport and storage vehicles for hydrocarbons, energy processing equipment, and fibreglass storage tanks. Its diversified portfolio and targeted investments to accelerate growth will support its financials and share price.

The momentum in its service segment and solid demand for compressed gas distribution equipment and residential and commercial petroleum tanks will support its financials. TerraVest’s focus on strategic acquisitions will enable it to generate incremental revenue and earnings. Further, TerraVest’s investments to improve its manufacturing efficiency and expand its product lines augur well for long-term growth.

goeasy stock

goeasy (TSX: GSY) is a must-have growth and income stock in your TFSA portfolio. This subprime lender is known for delivering stellar sales and earnings growth. Moreover, its leadership in Canada’s large non-prime lending market, solid credit underwriting capabilities, and focus on enhancing its shareholders’ value through higher dividend payments make it a compelling investment.

While goeasy’s top and bottom lines have grown at a solid double-digit rate over the past decade, this momentum will likely be sustained. Its wide product range, geographic expansion, omnichannel offerings, and increasing funding capacity will drive its loan portfolio and overall revenue.

Further, goeasy’s steady credit performance, leverage from higher sales, and focus on improving operating efficiency will cushion its bottom line and support higher dividend payouts.

Dollarama stock

Dollarama (TSX: DOL) offers stability, income, and growth, making it a top stock to buy and hold forever in a TFSA. The discount retailer has an extensive selection of consumer products at low and fixed price points. This value proposition enables the company to drive customer traffic regardless of the economic situation.

Thanks to its resilient business model and solid financials, Dollarama consistently outperforms the Canadian benchmark index. Beyond capital gains, Dollarama returns significant cash to its shareholders. For instance, it has raised its dividend 13 times since 2011.

Dollarama’s value pricing strategy, expansion of stores network, focus on efficient sourcing, and cost-control measures will support its top and bottom lines, driving future dividends and its share price.