Canadian stocks with fundamentally strong businesses, growing earnings bases, and multiple growth catalysts will likely generate stellar capital gains over time. So, if you plan to invest $7,000, which is the Tax-Free Savings Account (TFSA) contribution limit for 2025, here are the best stocks to buy now.
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Stock #1
Dollarama (TSX: DOL) is one of the best Canadian stocks for income, growth, and stability. The discount retailer’s solid financials and defensive business model have driven its stock price higher. Beyond above-average capital gains, Dollarama stock has returned significant cash to its shareholders. For instance, it has raised its dividend 13 times since 2011.
Dollarama sells a wide range of consumer products at low and fixed prices. This value proposition enables it to consistently drive customer traffic and boost revenues, regardless of the economic situation. Moreover, the retailer is expanding its store network, focusing on efficient sourcing, and taking cost-control measures, which will likely support its bottom line and drive future dividends and stock prices.
Stock #2
TerraVest Industries (TSX: TVK) is another top Canadian stock to add to your TFSA portfolio. Shares of this leading industrial manufacturer have outpaced the benchmark index by a significant margin. For instance, TerraVest stock gained over 175% in one year and over 906% in five years. The company’s diversified portfolio, strong demand for its services, and investments to accelerate growth drove its financials and share price.
The momentum in TerraVest’s business will likely sustain, supporting its share price. The company will gain from the solid demand for compressed gas distribution equipment and residential and commercial petroleum tanks.
Further, its accretive acquisitions, expansion of its product offerings, opportunities in the international market, and manufacturing efficiency will likely generate incremental revenue and earnings, boosting its share price. Moreover, its robust balance sheet and solid liquidity position will help it pursue high-growth opportunities and enhance shareholder value in the coming years.
Stock #3
Canadian Natural Resources (TSX: CNQ) is a solid stock to generate above-average total returns. The oil and gas producer consistently generates strong earnings and cash flows that support its stock price and higher dividend payments. Canadian Natural Resources stock has gained over 191% in the last five years. Moreover, its dividend grew at a compound annual growth rate (CAGR) of 21% in the last 25 years. The stock also offers a decent yield of 4.6%.
Canadian Natural Resources’s long-life, low-decline assets, well-balanced production, and focus on strategic acquisitions position it well to grow its earnings, providing a solid base for growth. Moreover, its low-capital, high-growth projects, operating efficiency, and strong balance sheet will enable it to generate significant free cash flows, pursue high growth opportunities, and drive higher payouts.
Stock #4
Canadian investors could buy Hammond Power Solutions (TSX: HPS.A) stock right now. The company manufactures dry-type transformers and power-quality products and is witnessing solid demand for its products from emerging sectors like artificial intelligence (AI), electric vehicles (EVs), healthcare, and infrastructure.
Looking ahead, the company’s steadily growing backlog suggests that the momentum in Hammond’s business will likely be sustained. Factors such as the growing need for more power and data, electrification of vehicles, and infrastructure investments will accelerate its growth rate. Further, strategic acquisitions and an expected rebound in traditional segments such as oil and gas, mining, and utilities will support its financial performance and drive its stock price.
