One of the best features of the stock market is that it gives everyone a chance to save their money and invest in businesses operating all across the country and the world in order to grow their savings and work toward financial freedom. Plus, with a TFSA, you can buy the best Canadian stocks and watch your capital grow even quicker as you save on the significant taxes you’d otherwise have to pay.
However, while it’s obvious that finding the best stocks to buy is essential to growing your money as efficiently as possible, it’s even more critical when investing in your TFSA. That’s because if you lose money investing in your TFSA, you don’t just lose your capital – you also lose that valuable contribution space, which cannot be regained.
Therefore, it’s crucial to take a long-term approach by investing in high-quality companies with reliable and resilient business operations. This strategy is far more effective than chasing today’s hottest stocks, which may lack the durability and long-term potential needed to sustain growth.
So, with that in mind, if you’ve got cash in your TFSA that you’re looking to put to work, here are three of the absolute best Canadian stocks to buy now and hold for years to come.
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Two of the best growth stocks in Canada
High-quality growth stocks are some of the best investments to buy for your TFSA because their consistent and substantial capital gains allow you to maximize the account’s tax-free benefits.
That’s why both goeasy (TSX:GSY) and Aritzia (TSX:ATZ) are some of the absolute best stocks to buy now and hold for years.
goeasy is a specialty finance stock that’s consistently grown at an exceptional pace. In fact, in just the last five years, it has earned investors a total return of 182%, which is a compound annual growth rate (CAGR) of more than 23%.
However, while that growth is impressive, it’s not surprising when you dig into goeasy’s numbers. Over that same five-year stretch, it has increased its revenue at a CAGR of 19.8% and, more importantly, it has increased its normalized earnings per share (EPS) by 31.9%.
Meanwhile, Aritzia, a vertically integrated design house, has also grown at an impressive and consistent pace, especially for a retail stock, showing why it’s one of the best to buy for your TFSA today.
Even with the pandemic impacting operations for many retail companies and higher inflation weighing on spending in the last few years, Aritzia’s sales have grown at a CAGR of 21.7% over the last five years. Meanwhile, its earnings before interest, taxes, depreciation and amortization have grown at a CAGR of 17.6% during that stretch.
That impressive growth in its operations has translated to a total return of 180% over the last five years, or a CAGR of 22.8%.
So, if you’re looking for some of the best stocks to buy for your TFSA today, high-quality growth stocks like Aritzia and goeasy are certainly some of the best to consider.
One of the best dividend stocks to buy for your TFSA
While growth stocks are some of the best investments to buy in your TFSA to maximize tax savings, high-quality dividend stocks can also be worthwhile, especially if your primary goal is passive income generation.
That’s why one of the best stocks you can buy now and hold for years is Emera (TSX:EMA), a lower-risk utility stock.
Owning a utility stock like Emera offers several advantages. The services Emera offers are essential, and its operations are regulated by the government. That makes both its revenue and cash flow generation highly predictable, which is why it’s a lower-risk stock.
Plus, because it’s a lower-risk stock, it adds stability to your TFSA, which is highly important given the limited contribution space we all have.
Furthermore, its predictable revenue and cash flow make it the ideal dividend stock. Not only does it consistently pay an attractive dividend, with its current yield sitting at roughly 5.4%, but it’s also constantly increasing its dividend payments each year.
So if you’re a passive income seeker looking for a high-quality and reliable stock to buy in your TFSA, a top utility stock like Emera is certainly one of the absolute best to buy and hold for years to come.
