2 Brilliant Canadian Stocks to Buy Now and Hold for the Long Term

A small-cap and a large-cap Canadian tech stock can both be terrific holdings to consider for your self-directed investment portfolio, especially at current levels.

Stock market investing isn’t all about finding the most exciting, trending, and high-growth stock and putting all your money in it. Jumping on the bandwagon to invest in trending stocks at the right time can be a terrific way to enjoy significant short-term gains. However, the key to sustained success as a stock market investor is parking your money in stocks that can deliver excellent returns on your investment for years down the line.

The tech industry is a rapidly growing sector in the Canadian economy as technological innovations become increasingly integral in every aspect of our lives. There are plenty of Canadian tech stocks to pick from, but not all are made the same. Due to the harsh overall economic environment, it is important to identify those with strong fundamentals and the ability to deliver solid returns in the long run.

Against this backdrop, here is a brilliant small-cap and a large-cap tech stock that you can consider investing in.

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."

Source: Getty Images

VitalHub

VitalHub Corp. (TSX: VHI) is a $445.24 million market capitalization software firm that’s still in its early stages of growth. The Toronto-headquartered company develops technology solutions for health and human services providers in the mental health, long-term care, home health, social service, acute care, and community health service sectors.

The company is building a strong portfolio of software solutions for the healthcare industry – something that the sector really needs right now to address understaffing, underfunding, and the overall stress that comes with it. The company is performing well, with its third quarter for fiscal 2024 seeing the company report a 25% year-over-year increase in revenue and a 25% increase in its annual recurring revenue in the same period.

As of this writing, it trades for $8.73 per share, down by 27% from its 52-week high. The recent downturn due to the broader market’s decline can be a good opportunity to add its shares to your portfolio on the dip.

Topicus.com

Topicus.com (TSXV: TOI) is an $11.49 billion market capitalization tech stock. Despite being a large-cap stock, Topicus is one of the lesser-known names in the Canadian tech space. The company provides vertical market software and vertical market platforms to clients across the private and public sectors. The company acquires leading software businesses that provide high-impact software solutions. It then uses its capital to build and manage those companies, leading them to greater heights under its umbrella.

Topicus primarily focuses on the European market, which is an attractive market for a company with the capital to invest in and acquire well-established companies. TOI stock has been publicly listed for just a few years, but it is already making great strides. As of this writing, Topicus stock trades for $138.57 per share, up by 120.83% from its IPO. With a large addressable market and plenty of growth opportunities ahead, it can be a solid long-term holding to consider.

Foolish takeaway

Buying and holding high-quality stocks with strong long-term growth potential in a Tax-Free Savings Account (TFSA) can help you reap the benefits even further. The tax-sheltered status of the TFSA lets the value of your holdings in the account grow without incurring income or capital gains tax. This means, you can withdraw funds from the account without worrying about paying taxes on all the gains your investments made in it.

VitalHub stock and Topicus.com stock can be strong long-term winners in the Canadian tech space, each for its own reasons. If you have contribution room available in your TFSA, you can consider allocating some of it to shares of these Canadian tech stocks.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Topicus.com and Vitalhub. The Motley Fool has a disclosure policy.

More on Investing

Utility, wind power
Dividend Stocks

I Keep Coming Back to This 5.6% Dividend Stock

Brookfield Renewable offers a 5.6% yield and targets 10%+ FFO growth. Here is what management said, plus risks every Canadian…

Read more »

woman relaxes with phone
Dividend Stocks

Telus Dividend Reliability: Is the Telecom Still Worth Holding?

Telus (TSX:T) stock might be a falling knife, but the shares still look like a dividend deal going into November…

Read more »

hand stacks coins
Dividend Stocks

I Split $20,000 Across 3 TSX Stocks for $715 a Year in Passive Income: Here Are the Picks

With their reliable cash flows, consistent dividend growth, and strong long-term growth prospects, these three TSX stocks could help investors…

Read more »

concept of real estate evaluation
Dividend Stocks

A Tailor-Made TFSA Stock: An 8.3% Yield With Monthly Paycheques

A non-bank lender paying monthly dividends, including year-end special dividends, is tailor-made for a TFSA.

Read more »

A steel grain silo storage tank with solar panel in a yellow canola field in bloom in Alberta, Canada.
Energy Stocks

Here’s Why I Love Freehold Royalties (and Its Generous 6.1% Dividend Yield)

Here’s why Freehold’s royalty business, generous monthly dividend and room for long-term growth make it one of my favourite Canadian…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

CN Stock Looks Like a Buy After Raising Its 2026 Outlook

CN stock has a stronger 2026 outlook and a 2.2% dividend yield. Here’s what supports the buying case and what…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How I’d Structure a $25,000 TFSA for Steady Income, Stock by Stock

Building a TFSA stock portfolio around balance, sustainability, and capital protection is the key to generating steady, tax-free income.

Read more »

woman considering the future
Dividend Stocks

For Retirement Planning, How Much Goes in the RRSP and How Much in the TFSA?

To build tax-efficient retirement wealth, Canadians must know when to prioritize the RRSP over the TFSA, and vice-versa.

Read more »