The United States under Donald Trump has adopted protectionist policies to boost its economy. Meanwhile, other countries have retaliated with counter-tariffs, which could hurt global growth. Given the uncertain outlook, the equity markets could remain volatile in the coming months. So, Canadian investors should be careful when investing through a TFSA (tax-free savings account). A decline in the stock price of a company invested through a TFSA and subsequent selling could lead to capital erosion and lower TFSA contribution room.
Against this backdrop, let’s look at three TSX stocks that are ideal for your TFSA in this uncertain outlook.
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Dollarama
Dollarama (TSX:DOL) is one of the top Canadian stocks to add to your TFSA due to its consistent financial and stock price growth. The discount retailer has enjoyed healthy same-store sales growth even during challenging macro environments due to its attractive value offerings. Its superior direct-sourcing model and efficient logistics decrease its expenses, allowing it to offer various consumer products at attractive prices.
Moreover, Dollarama has expanded its store network to 1,601, with 85% of Canadian households having at least one store within 10 kilometres. Meanwhile, the company is growing its footprint and hopes to increase its store count to 2,200 by the end of fiscal 2034. Dollarama also owns a 60.1% stake in Dollarcity, which is also strengthening its footprint in Latin America. Dollarcity expects to operate 1,050 stores by the end of 2031 compared to 588 at the end of the third quarter of fiscal 2025. These growth initiatives could support Dollarama’s financial growth in the coming quarters. Considering all these factors, I believe the discount retailer would be an ideal addition to your TFSA.
Fortis
Second on my list would be Fortis (TSX:FTS), which meets the electric and natural gas needs of 3.5 million customers across the United States, Canada, and the Caribbean. Given its regulated asset base and low-risk transmission and distribution business, the utility assets have produced consistent financials irrespective of broader market conditions. Supported by these healthy financials, the company has delivered an average annual total shareholder return of 10.2% for the last 20 years. It has also raised dividends for 51 years while currently offering a forward yield of 3.9%.
Moreover, the utility company hopes to grow its rate base at an annualized rate of 6.5% through 2029 by investing around $26 billion. Meanwhile, it expects to fund around 70% of these investments through the cash generated from operations and dividend re-investments. So, these investments would not substantially raise Fortis’ debt levels. Further, the implementation of efficiency programs and falling interest rates could boost Fortis’ profitability in the coming quarters.
Waste Connections
Another Canadian stock I believe would be an ideal addition to your TFSA is Waste Connections (TSX:WCN). The waste management company collects, transfers, and disposes of solid, non-hazardous solid waste. Given its operations primarily in secondary and exclusive markets, it faces lesser competition and enjoys higher margins. Moreover, the company has expanded its footprint through organic growth and acquisitions, driving its financials. Supported by these solid financials, the company delivered over 500% returns in the last 10 years at an annualized rate of 19.8%.
WCN completed record acquisitions last year and could continue its organic and inorganic growth this year. It has also adopted technological advancements to improve employee safety and operating efficiency. Further, improving employee engagement and retention could support its margin expansion. Meanwhile, the company’s management projects its 2025 revenue to grow by around 7%, while its adjusted EBITDA margin could expand by 80 basis points to 33.3%. Considering its solid financials, healthy underlying business, and impressive growth prospects, I believe the uptrend in WCN’s stock price will continue, making it an attractive buy.
