Got $7,000? The Best Canadian Stocks to Buy Right Now

There’s a lot to consider when you decide to invest your contribution from your TFSA, so let’s look at some options.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published January 23, 2025 5:00 pm EST

Finding the best Canadian stocks for your Tax-Free Savings Account (TFSA) can be an exciting journey. You’re building a portfolio that grows tax-free, so it’s all about maximizing your gains while staying mindful of your risk tolerance. Are you wondering how to get going? To start, focus on Canadian stocks with strong fundamentals, consistent earnings, and a track record of shareholder rewards through dividends or capital appreciation. These qualities often point to companies that can weather market fluctuations and deliver long-term growth. This is why today, we’re looking at three strong options.

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National Bank

National Bank of Canada (TSX: NA) is an excellent example of a stable financial institution. With a forward price-to-earnings (P/E) ratio of 12.27 and a return on equity (ROE) of 15.18%, the bank demonstrates efficiency in generating profits for shareholders.

Its dividend yield of 3.13%, combined with a payout ratio of 41.29%, suggests it’s well-positioned to sustain payouts. In its most recent earnings, NA reported a quarterly revenue growth of 19.7% year over year and a 24.3% increase in earnings, underscoring its robust performance in a competitive sector.

Alimentation Couche-Tard

Alimentation Couche-Tard (TSX: ATD) is a giant in the consumer defensive sector, operating convenience stores and fuel stations globally. With a market cap of $72.05 billion, ATD showcases its dominance.

Its forward P/E ratio of 16.16 reflects its valuation in relation to expected earnings, while a return on equity (ROE) of 19.72% highlights its profitability. Recent quarterly revenue reached $71.92 billion, reflecting 17% growth year over year. Despite a slight dip in earnings of 5.2%, Couche-Tard continues to invest in expansion, bolstering its long-term growth outlook.

Alamos Gold

For those interested in the precious metals sector, Alamos Gold (TSX: AGI) offers an intriguing opportunity. The Canadian stock’s most recent quarter showcased 40.9% revenue growth and a stunning 114.5% earnings increase. These numbers reflect a strong operational performance underpinned by rising gold prices and efficient mining operations.

With a forward P/E of 15.17 and a low debt-to-equity ratio of 8.48%, AGI balances growth with financial stability, making it a strong play for both defensive and growth-minded investors.

A perfect portfolio

When evaluating potential stocks, consider the historical performance. NA’s shares have surged by 29% year to date, outperforming many of its peers, while ATD has proven resilient, maintaining steady growth over the past decade. AGI’s impressive 74.65% gain in the past year highlights its leverage to the gold market, which often thrives during economic uncertainty.

Future outlooks also play a critical role in stock selection. Analysts expect NA to benefit from Canada’s stable banking environment. Couche-Tard’s global footprint positions it for continued growth as it expands into emerging markets and enhances its fuel and non-fuel offerings. For Alamos Gold, the growing demand for safe-haven assets amid geopolitical and economic tensions bodes well for its performance.

Dividend history is another factor to weigh. National Bank boasts a strong dividend track record, with steady increases over time. Couche-Tard’s dividends are modest but supported by a low payout ratio, allowing room for growth. Alamos Gold’s dividend yield is lower but offers the advantage of capital appreciation in a sector known for its cyclical returns.

Bottom line

These three stocks each bring unique strengths to a TFSA. The solid earnings, future potential, and resilience make them compelling Canadian stocks for anyone looking to grow wealth tax-free. By focusing on these qualities, you can build a portfolio that not only withstands market volatility but also thrives in the long term.