Canadian investors should consider using the Registered Retirement Savings Plan (RRSP) as a long-term investment vehicle. The registered account offers tax advantages through deductible contributions, which reduces your taxable income. Moreover, investments can compound efficiently in the RRSP as interest, dividends, and capital gains accumulate without taxation until withdrawal.
This tax deferral strategy can be beneficial if withdrawals occur during retirement when income and tax rates are typically lower. RRSPs also provide flexibility through features like carry-forwards, spousal income splitting plans, and programs like the Home Buyers’ Plan and Lifelong Learning Plan that permit temporary, tax-free withdrawals.
You can create a diversified RRSP portfolio by holding various securities, including stocks, exchange-traded, mutual funds, and fixed-income products. Moreover, conversion options to RRIFs (Registered Retirement Income Funds) or annuities ensure a structured income stream upon retirement.
In this article, I have identified two TSX stocks you can buy and hold in an RRSP right now.
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Is Shopify stock a good buy in 2025?
Valued at a market cap of US$117.3 billion, Shopify (TSX: SHOP) is among the largest companies in Canada. The ongoing market volatility has meant the TSX tech stock currently trades almost 40% below all-time highs, allowing you to buy the dip.
Shopify delivered impressive fourth-quarter (Q4) results with revenue of US$2.81 billion, up 31% year over year, beating analyst estimates of US$2.73 billion. However, earnings came in at US$0.39 per share, below estimates of US$0.43 per share.
“Q4 was an incredible quarter. The entire 2024 was exceptionally strong,” said Harley Finkelstein, Shopify’s president, highlighting that the company achieved 24% GMV (gross merchandise volume) growth and 26% revenue growth for the full year.
Shopify forecasts first-quarter revenue growth in the mid-20% range, roughly aligning with analyst expectations. However, investors should note that operating expenses are projected to be 41% to 42% of revenue in Q1, up from 32% in Q4.
Alternatively, Shopify faces headwinds from extended trial periods, international expansion costs, and potential impacts from President Trump’s tariffs. Management emphasized that they’re prioritizing growth investments over margin expansion, signalling that free cash flow margins may plateau at current levels despite Shopify’s strong market position.
Analysts tracking the TSX tech stock expect adjusted earnings to expand from US$1.26 per share in 2024 to US$2.5 per share in 2027. Given consensus price targets, Wall Street remains bullish on SHOP stock and expects it to gain almost 50%.
Is the TSX stock undervalued?
Valued at a market cap of $1.5 billion, Trisura Group (TSX: TSU) is part of the insurance sector, which is fairly recession-resistant. The TSX stock is down over 30% from all-time highs even though the specialty insurer reported solid 2024 results. Trisura’s operating return on equity (ROE) of 19.4% exceeded its mid-teens target, driven by strong underwriting performance and investment returns.
Trisura reported a record operating net income of $136 million, with book value per share jumping 26% to $16.44. Insurance revenue grew 11.8% year over year to $3.1 billion.
Chief Executive Officer David Clare highlighted the company’s U.S. Surety business as a standout performer, growing 197% in 2024 and reaching the top 35 among U.S. sureties. “We’ve seen a little better and a little faster execution of our U.S. Surety expansion,” Clare told analysts.
However, investors should note potential headwinds. Trisura took charges related to “exited lines” in its U.S. programs business, where it cut ties with underperforming programs. While management doesn’t expect further material impacts, this segment carries execution risk.
Looking ahead, Trisura maintained its targets of premium growth, ROE, and book value per share growth exceeding 15%, aiming for $1 billion in book value by 2027.
Despite demonstrating impressive profitability metrics, the key risk remains whether Trisura can maintain underwriting discipline while simultaneously pursuing ambitious growth across multiple specialty insurance segments.
Analysts expect Trisura’s adjusted earnings to expand from $2.8 per share in 2024 to $3.44 per share in 2026. So, priced at 9.3 times forward earnings, the TSX stock is cheap and trades at a discount of 50% to consensus price targets.
