Your Tax-Free Savings Account (TFSA) has a fresh contribution limit of $7,000 for 2025. You could plan your TFSA investments by preparing a watchlist with a stock for every mood. For instance, an evergreen stock you can invest in when you have the money because the growth stocks you have been eyeing are at crazy highs. Then, you can have long-term growth and dividend stocks, which you keep accumulating for your retirement. And you can have a small amount allocated for opportunistic stocks.
Five Canadian stocks to lock in your TFSA
Without further ado, here is a list of five long-term growth and dividend stocks you can accumulate in your TFSA to generate wealth and passive income.
Telus stock
Telus (TSX:T) stock has recently gathered momentum after 32 months of the telecom sector downturn. The headwinds that kept stressing the cash flows are gradually subsiding. It could be the year of recovery for Telus as the company focuses on reducing its debt and improving free cash flow by monetizing on the 5G opportunity. The 5G could bring broadband-like speed to edge devices, facilitating artificial intelligence (AI) edge computing.
With the internet infrastructure in place, new AI-ready embedded devices could proliferate, driving demand for cloud and internet subscriptions. Telus will stand to benefit from these technology upgrades over the next decade. Now is the time to buy and hold this for another 10 years and enjoy the 7% annual dividend growth. You could consider opting for the dividend reinvestment plan to compound your returns and build a sizeable passive income for retirement.
Enbridge stock
Enbridge (TSX:ENB) is another evergreen dividend stock you could consider holding in your TFSA. It has a 29-year dividend-growth history and +50 years of dividend-paying history. The pipeline company plans to accelerate its dividend growth rate from 3% to 5% from 2027 onwards. It means your passive income could grow with inflation.
However, the stock is trading at its all-time high of over $65, and this price is not sustainable. You might want to add it to the watchlist and keep accumulating this stock when it trades below $50 per share to lock in a 7% dividend yield. Enbridge has suspended its dividend-reinvestment plan, so you can use the dividend money to buy opportunistic stocks such as Hive Digital Services or Shopify when they trades below $100.
Growth stocks
Descartes Systems (TSX:DSG) and Constellation Software (TSX:CSU) are resilient growth stocks. They are reinvesting profit to grow their business. This growth increases the business value and appreciates the share price.
Descartes Systems
Descartes is acquiring several small companies to strengthen its supply chain solutions offerings. The risks of a potential trade war could pull down Descartes’s stock price but boost demand for its global trade intelligence and customs solutions. The complications in global trade bring more revenue for Descartes, which keeps upgrading its systems to accommodate these challenges. This cycle generates an average annual return of 20%. The stock had a tepid growth of only 6.4% in 2022-2023. However, it made up for this slowdown with a 48% jump in 2024 as trade picked up.
Constellation Software
Constellation reinvests its free cash flow to acquire small vertical-specific software companies that cater to mission-critical applications. Its success lies in its deal-closing ability. While acquiring companies, it doesn’t enter into a bidding war, makes an all-cash deal, and selects companies earning regular cash flows.
The acquired companies continue to run independently with little interference from Constellation. However, they get access to Constellation’s vast network and management support. While some acquisitions may fail, and some may succeed, the net outcome is positive. This compounding effect helps Constellation increase its enterprise value and generate a 25-30% average annual return to shareholders.
Royal Bank of Canada
Apart from the above four stocks, Royal Bank of Canada could be your go-to stock in a bull or bear market.
Investor takeaway
A base investment plan can help you stay focused and regular with your TFSA investing. If you know where you can invest, you will not stall your investments because there is no buying opportunity.
