You can hold several qualified investments in a Tax-Free Savings Account (TFSA), including stocks, bonds, exchange-traded funds, and mutual funds. As any returns earned in the TFSA are exempt from taxes, Canadian investors should consider adding quality stocks to the TFSA and benefit from outsized gains over time.
Here are the top TSX growth stocks TFSA investors can buy right now.
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Magellan Aerospace stock
Valued at a market cap of $540 million, Magellan Aerospace (TSX: MAL) designs, engineers, and produces components for aircraft engines and structures. Its product range includes engine frames, turbine components, wing parts, landing gear, and nacelle systems. The company also manufactures rocket components and provides space-related services, including satellite support.
Moreover, Magellan’s advanced manufacturing capabilities include 3D sand printing, digital radiography, and maintenance, repair, and overhaul services for engines and components.
In the last 12 months, Magellan Aerospace increased sales by 9% year over year to $925.2 million. Its sales are forecast to expand to $1 billion in 2025 and $1.1 billion in 2026. Comparatively, adjusted earnings per share are forecast to grow from $0.17 in 2023 to $0.79 in 2025. So, priced at 12 times forward earnings, MAL stock is relatively cheap and is priced at a discount of 55% to consensus estimates.
Sylogist stock
Sylogist (TSX: SYZ) is a Canadian software company specializing in enterprise resource planning solutions. Its Serenic Navigator platform provides integrated accounting, payroll, human resources, and budget management software. Sylogist serves public sector clients, including local governments, educational institutions, and defence contractors.
In the third quarter (Q3) of 2024, Sylogist saw a 14% year-over-year growth in bookings driven by upsells and cross-sells. The company’s chief executive officer, Bill Wood, explained, “The success we’re seeing from our targeted competitor displacement strategy, the success of our SaaS offerings relative to the competitive landscape and strong customer referrals drove our overall win rate even higher to above 70% in Q3.”
Sylogist stated that its bookings pipeline more than doubled in Q3, which should drive future revenue higher. Analysts expect the company’s earnings to expand from $0.05 per share in 2023 to $0.28 per share in 2025. So, priced at 36 times forward earnings, SYZ trades at a 30% discount to consensus estimates.
Groupe Dynamite stock
The final growth stock on my list is Groupe Dynamite (TSX: GRGD). Valued at a market cap of $1.9 billion, Groupe Dynamite is a fashion retailer poised to grow at an enviable rate. The Montreal-based company has two distinct brands: GARAGE and DYNAMITE.
In fiscal Q4 of 2024 (ending in February), its comparable sales grew by 9.5% year over year, while full-year sales rose by 12.3%, given its preliminary results. On a two-year stacked basis, comparable sales growth reached 19.3% for Q4 and 20.5% for fiscal 2024.
Groupe Dynamite is expanding its U.S. presence by opening new GARAGE stores while strategically optimizing locations to enhance customer experience. It expects adjusted earnings before interest, taxes, depreciation, and amortization margins to increase due to higher average unit retail prices, reduced markdowns, and lower operating expenses as a percentage of sales.
Priced at 12.5 times forward earnings, GRGD stock is reasonably valued and trades at a discount of 50% to consensus price target estimates.
