The TFSA is an excellent tool Canadians have to buy TSX stocks for the long haul and take advantage of the power of compounding.
In 2025, the TFSA contribution limit increased to $7,000. If you’ve been eligible since the TFSA was introduced in 2009, your total contribution room is now $102,000 — a significant amount of capital to invest and grow tax-free.
So, if you’re wondering what stocks to buy with your $7,000 contribution, here are seven stocks to consider.
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Two ultra-cheap recovery stocks
Since you don’t have to pay tax on any capital gains you make when you buy TSX stocks in your TFSA, many investors elect to look for undervalued companies to invest in.
And while there are several stocks trading cheaply in the current environment, two of the cheapest TSX stocks you can buy are Air Canada (TSX:AC) and Cineplex (TSX:CGX).
Both Air Canada and Cineplex have been trading undervalued since the pandemic and are among the last yet to see their shares recover.
In Air Canada’s case, its operations have recovered fully and its revenue now exceeds what it was in 2019 leading into the pandemic. However, because of the significant debt it took on during the pandemic, there’s still elevated risk with Air Canada, which is one of the main reasons the shares have yet to fully recover.
Cineplex, on the other hand, doesn’t have as much risk from a balance sheet standpoint, but it continues to face industry headwinds, such as Hollywood strikes delaying content for its theatres and the consistent growth in popularity of streaming services, which could keep its attendance numbers from seeing a full recovery.
However, while both stocks certainly aren’t without risk, both are trading ultra-cheap, making them some of the best stocks value investors may want to buy for their TFSAs.
Two top long-term investments
While value stocks can offer potential as they recover, many investors will prefer more reliable stocks that still have significant growth potential over the long haul.
So, if you’re looking for high-quality businesses that aren’t quite as risky, two of the very best TSX stocks to buy are Brookfield Infrastructure Partners (TSX:BIP.UN) and Brookfield Renewable Partners (TSX:BEP.UN).
Brookfield companies are well-known for their incredible management teams and consistent focus on growing shareholder value over the long haul.
The infrastructure company is one of the best to buy because the assets it owns are essential, and its portfolio is diversified all over the world. Furthermore, it currently offers a yield of 5.2%.
On the other hand, the renewable energy company is one of the best TSX stocks to buy due to its dominance in its sector and the fact that green energy has so much long-term growth potential.
Furthermore, it offers an even higher dividend yield of roughly 6.7% and currently trades ultra-cheaply.
Three top TSX dividend stocks to buy now
Dividend stocks are some of the best TSX stocks you can buy, especially in your TFSA. And while both Brookfield stocks pay an attractive distribution, here are three more of the top TSX dividend stocks to buy now.
Fortis (TSX:FTS) and AltaGas (TSX:ALA) are two of the best passive income generators to buy due to their essential operations as utility stocks.
In fact, not only are the services that utilities offer essential, but they’re also regulated by governments, making their future revenue and income highly predictable and, therefore, making them some of the best and most reliable dividend stocks.
And while Fortis is purely a utility stock, AltaGas also offers midstream services. That means it has slightly more risk than Fortis, which is one of the safest stocks you can buy on the TSX. However, it also means that AltaGas has slightly more growth potential.
Meanwhile, Freehold Royalties (TSX:FRU) is one of the top TSX stocks to buy due to the significant cash flow it generates as other energy companies use its land to produce energy.
The stock is constantly earning royalties and has much fewer expenses and capital expenditures than its energy industry peers, allowing it to consistently return significant capital to investors.
So, if you’re looking for top TSX stocks to buy for your TFSA, Freehold and its current yield of 8.5% is certainly one you’ll want to consider.
