It’s no secret that saving your hard-earned cash and finding high-quality stocks to buy and hold for the long haul is the best way to prepare for retirement and achieve financial freedom.
Furthermore, the Tax-Free Savings Account (TFSA) is an incredibly powerful and useful tool that Canadians have at their disposal to grow their wealth all the time.
The fact that you can own a portfolio of top-notch businesses and allow the gains from those companies to compound tax-free over time can lead to significant gains.
So, if you’ve got some cash on the sidelines that you’re looking to put to work in your TFSA, here are four of the highest-quality stocks in Canada to buy now and hold forever.
Source: Getty Images
Two top defensive growth stocks to buy and hold in your TFSA
Building a long-term portfolio in your TFSA requires solid research and diversification. And some of the best stocks to buy and hold for the long haul are defensive growth stocks like Thomson Reuters (TSX: TRI) and Jamieson Wellness (TSX: JWEL).
Defensive growth stocks are some of the best businesses to invest in because they have reliable operations that can continue to generate returns even through periods of slower economic growth. However, they can also earn investors significant returns when the market is rallying.
Thomson Reuters, for example, has an impressive business model that’s built around providing essential information to professionals in industries like law, tax, and media. Furthermore, its subscription-based revenue helps keep cash flow steady, even when the economy slows down.
Plus, it’s also been investing heavily in tech and artificial intelligence, which should help drive growth over the long haul.
So, it’s no surprise to see that over the last decade, Thomson Reuters has earned investors a total return of more than 510%, showing why it’s one of the best stocks you can buy and hold forever in your TFSA.
Meanwhile, Jamieson Wellness is another high-quality defensive stock with long-term growth potential. The company is a market leader in vitamins and supplements, essential products that continue to see their demand grow as more consumers prioritize health and wellness.
Furthermore, Jamieson also has strong brand recognition, solid margins, and a growing international presence. Not to mention, the stock has demonstrated for years that it can grow its operations both by acquisition and organically, which is why it’s one of the best stocks to buy and hold for the long term in your TFSA.
Two high-yield dividend stocks to own for the long haul
High-quality, high-yield dividend stocks are also some of the best stocks to buy and hold in your TFSA. The fact that you can earn dividend income and significant capital gains without paying any tax makes them perfect for long-term wealth building.
Furthermore, since many of these stocks operate in mature, reliable industries, they can offer both stability and strong returns over time.
For example, Brookfield Infrastructure Partners (TSX: BIP.UN) owns a global portfolio of essential infrastructure assets that generate constant and significant cash flow.
This cash flow allows Brookfield to return a tonne of capital to investors while also retaining some of those earnings to invest in future growth.
For example, right now, the stock offers a yield of more than 5.7% and aims to increase that distribution by 5% to 9% each year. On top of that, Brookfield targets long-term returns of 12-15% a year, making it the perfect stock to buy and hold in your TFSA.
Meanwhile, Enbridge (TSX: ENB) is another high-quality dividend stock you can hold confidently in your TFSA.
Its operations, which include transporting oil and gas, storing energy, and owning a massive utility business, among others, make it one of the most essential businesses in the North American economy.
Furthermore, those essential operations combined with its long-life assets allow it to generate billions in cash flow every year, regardless of the economic environment. That means Enbridge can return a tonne of cash to investors and still have more to invest in expanding its footprint.
And if you buy Enbridge stock in your TFSA today, you can lock in a dividend yield of around 5.9%. On top of that, Enbridge has increased its dividend every single year for three decades now.
