Macro uncertainty and trade disputes have spiked market volatility. Amid challenges, investing in some of the best Canadian stocks with track records of weathering tough times could be a solid strategy to boost your portfolio. These stocks have fundamentally strong businesses, and their long-term growth potential remains intact, making them compelling investments right now.
Moreover, investing in these best Canadian stocks through a Tax-Free Savings Account (TFSA) can help you earn tax-free capital gains and dividend income. So, if you have $7,000 to invest, which is the contribution limit for the TFSA in 2025, consider these stocks now.
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Hydro One stock
Hydro One (TSX:H) is one of the best Canadian stocks to beat the broader market, add stability, and generate steady income. The company is engaged in electricity transmission and local distribution. Its operations do not involve power generation, so it remains unaffected by changes in commodity prices, which adds stability amid market volatility.
The utility giant’s operations are regulated, enabling it to generate steady earnings and deliver predictable cash flows regardless of market conditions. Hydro One has rewarded its shareholders with higher dividends and delivered stellar gains thanks to its resilient business model and solid cash flows. For instance, it has raised its dividend for eight consecutive years at a compound annual growth rate (CAGR) of at least 5%. Further, Hydro One stock has gained over 136% in five years, delivering a CAGR of 18.7%.
Hydro One’s low-risk earnings, planned rate base growth, and regulated cash flows will enable it to deliver stellar capital gains and support higher dividend payments. Hydro One projects its rate base to grow at a CAGR of 6% through 2027. This will lead to earnings growth of about 6–8% annually during the same period and enable it to grow its dividend by 6% annually.
Moreover, Hydro One will likely benefit from increasing electricity demand led by the electrification of commercial buildings and vehicles, population growth, and the expansion of data centres.
Aritzia
Aritzia (TSX:ATZ) is another Canadian stock TFSA investors could consider for solid capital gains. Shares of this Canadian clothing company have gained over 220% in the last five years, outperforming the broader market. While trade restrictions and tariffs pose short-term margin headwinds, the company’s long-term growth fundamentals remain solid.
Aritzia’s exclusive fashion brands, expanding boutiques, growing penetration in the U.S., and efficient supply chain will support its financials and, in turn, its stock.
Looking ahead, Aritzia plans to open new boutiques in the U.S., which will accelerate its growth rate and strengthen its brand visibility. Further, the fashion retailer is expanding its omnichannel capabilities, adding more convenience to support its growth.
The company’s management projects a double-digit growth in its top line in the medium term. Higher sales and its focus on optimizing costs will cushion its earnings, supporting its share price.
Waste Connections stock
TFSA investors could add Waste Connections (TSX:WCN) to their portfolio. The company provides non-hazardous waste collection and disposal services focusing on secondary and rural markets. This strategy enables it to lower customer churn while ensuring stable revenue.
Thanks to its solid operating performance, WCN generates strong free cash flows, which allow it to accelerate growth through acquisitions and reward its shareholders with consistent dividend growth.
Looking ahead, Waste Connections is well-positioned for continued growth. The price-driven organic growth, strategic acquisitions, and rising recycled commodity revenue are expected to bolster its financials and dividend payouts. Additionally, its early-mover advantage in select rural markets and niche sectors such as energy exploration and production waste treatment provides further opportunities for long-term growth.
