When it comes to saving your hard-earned money and putting it back to work for you, the Tax-Free Savings Account (TFSA) is one of the best investment vehicles that Canadian investors have at their disposal. Furthermore, with more contribution room offered to investors each year, the TFSA is the perfect place to buy high-quality stocks that you plan to own for the long haul.
However, although each year comes with new contribution space, the overall contribution room is still limited. Therefore, it’s essential to maximize your returns by picking high-quality, long-term growth stocks that will consistently grow in value.
That’s why the best stocks to buy for a TFSA are those that can provide a mix of growth, passive income, and, most importantly, reliability to ensure your money is protected while you look to build significant long-term wealth.
So, with that in mind, if you’ve got cash in your TFSA that you’re looking to invest, here are three of the best Canadian stocks to buy now and hold for the long haul.
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A top Canadian growth stock to buy in your TFSA while it’s cheap
If you’re looking for an investment that’s undervalued, reliable and has plenty of long-term growth potential, WELL Health Technologies (TSX:WELL) is one of the best to consider.
WELL has been one of the fastest-growing stocks in Canada for years as it’s expanded its digital healthcare platform. And while its digital healthcare businesses continue to help the company expand, it’s also recently been acquiring outpatient clinics across the country and has quickly become the largest owner/operator of these clinics in Canada.
What really makes WELL a high-quality investment, though, in addition to its growth potential and the fact that it’s trading undervalued, is that the healthcare sector is highly recession-resistant.
Therefore, its business model of acquiring and improving the profitability of physical clinics across the country while also providing telehealth services, electronic medical records, and digital healthcare solutions allows it to capitalize on the steadily increasing demand for healthcare and digital health management.
And while its revenue growth is still impressive, expected to jump by another 16.3% in 2025, what really makes WELL a compelling investment, especially at its current valuation, is the growth potential of its profitability.
For example, while its normalized earnings per share (EPS) is only expected to have increased by 11% in 2024, analysts estimate it will jump by nearly 30% in 2025.
Therefore, while WELL trades more than 30% off its 52-week high, it’s easily one of the best stocks to buy in your TFSA today.
Two top defensive growth stocks
In addition to WELL, two more of the best Canadian stocks to buy in your TFSA that are both defensive and have long-term growth potential are AltaGas (TSX:ALA) and Dollarama (TSX:DOL).
AltaGas is a leading energy infrastructure company focusing on natural gas utilities and midstream services. Unlike volatile oil producers, AltaGas benefits from stable revenue streams, as its utility segment is highly regulated and provides consistent cash flow.
However, while its core operations are defensive and reliable, AltaGas also has plenty of long-term growth potential as it builds new projects, especially with its liquefied petroleum gas (LPG) export business.
Furthermore, AltaGas has done an impressive job in recent years to sell off non-core assets and significantly strengthen its balance sheet to ensure it’s a reliable stock that investors can have confidence in owning for the long haul.
Plus, on top of its reliability and long-term growth potential, AltaGas also offers investors a current dividend yield of roughly 3.3%, making it one of the best stocks to buy in your TFSA today.
Meanwhile, Dollarama is one of the very best Canadian stocks that you can own.
In fact, it’s not only one of the fastest-growing and most consistent stocks on the market, but it actually performs its best when the economy is slowing, making it a highly reliable and recession-resistant business.
For example, over the last decade, its revenue has increased at a compound annual growth rate (CAGR) of 10.6%, while its normalized EPS has increased at a CAGR of more than 18%.
Therefore, if you’re looking for the best Canadian stocks to buy in your TFSA, there’s no doubt that Dollarama is a top stock to consider.
