The Tax-Free Savings Account (TFSA) program helps Canadians meet short- and long-term financial goals and have emergency funds. Its most salient feature is tax-free money growth, provided accountholders stick to the governing rules.
According to a BMO Investment Survey, the average TFSA balance in 2024 hit an all-time high of $44,987. The primary concern of poll respondents is the uncertain economic times. In this market, prudent investors can invest in income-generating financial instruments like bonds, mutual funds, guaranteed investment certificates (GICs), exchange traded funds (ETFs), and stocks.
However, given the economic environment in 2025 and tariff war with the U.S., stock investing is the best option to take full advantage of your TFSA and create additional or passive income. Two solid companies to invest in today are Extendicare (TSX:EXE) and Corby Spirit and Wine Limited (TSX:CSW.A).
TFSA investors can earn two ways from either stock: dividend income and price appreciation.
Strategic transformation
Extendicare continues to outperform, notwithstanding the elevated market volatility. At $13.04 per share, the healthcare stock is up 23.6%-plus year-to-date versus the TSX’s 0.12%-plus and the sector’s -12.7%. If you invest today, the dividend offer is 3.7%. Moreover, the payout frequency is monthly.
The $1.1 billion company operates long-term care (LTC) facilities for seniors and provides home healthcare services. In 2024, revenue increased 12% year-over-year to $1.5 billion, while net earnings rose 121.3% to $75.2 million compared to 2023.
Dr. Michael Guerriere, president and CEO of Extendicare, said, “The steps we have taken over the past two years to implement our strategic transformation are evident in our strong fourth quarter and full-year results.” He added that the improved performance, strong balance sheet, and considerable prospects for future growth enabled a 5% dividend increase.
Smart buy
There is heightened attention on Corby Spirit and Wine given the decision of the Liquor Control Board of Ontario (LCBO) to remove U.S. booze or alcohol products from the shelves. Still, even without the trade tension, the $431.9 million Canadian manufacturer, marketer and importer of spirits, wines, and ready-to-drink cocktails is a smart buy.
At $15.42 per share, Corby investors are up 24.9%-plus year-to-date and partake in the 6% dividend. But why is the consumer defensive stock outperforming? In Q2 fiscal 2025 (three months ending December 31, 2024), revenue and adjusted earnings increased 10% and 8% year-over-year respectively to $61.7 million and $8.4 million. The Board also approved a 5% dividend hike.
Management strengthened Corby’s position in the fast-growing ready-to-drink (RTD) alcoholic beverage category by closing the acquisition of Age Beverage Group in fiscal 2024.
Furthermore, in the first half of fiscal 2025, cash flow from operating activities climbed 68% to $35.6 million from a year ago. Its President and CEO, Nicolas Krantz, said, “In a challenging market context and uncertain environment, we continue to capitalize on our excellence in execution and leverage the strength and diversity of our portfolio to adapt successfully to channel expansion opportunities.”
Kratz added that Corby closely monitors regulatory and trade changes but remains confident in its business resilience regardless of the environment.
Utilize your TFSA
Canadian investors should utilize or maximize their available TFSA contribution rooms if finances allow. You can build a financial buffer against inflation and a potential recession.
