Where I'd Invest my TFSA Savings in the TSX Today

Where I’d Invest my TFSA Savings in the TSX Today

If you want the stability of defence with the growth from tech, this is the ideal stock.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 7, 2025 9:00 pm EDT

When you think about the best places to invest your Tax-Free Savings Account (TFSA) savings on the TSX today, there’s one name that stands out for tech-savvy, long-term investors: CGI (TSX:GIB.A). This homegrown IT powerhouse has quietly become one of Canada’s strongest and most reliable companies in the digital services space. And for those focused on tax-free growth within their TFSA, it offers exactly the kind of consistent performance, scalability, and future-forward business model that can compound wealth over time. Let’s get into why.

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The stock

CGI is based in Montreal and has been around since the 1970s. The tech stock built a reputation for delivering dependable results and long-term value. CGI’s main business revolves around providing end-to-end IT and business consulting services, including systems integration, cybersecurity, cloud transformation, and managed IT services. It has a strong presence not only in Canada but also across the U.S. and Europe, serving clients in industries like banking, government, healthcare, utilities, and manufacturing.

That global reach is one of the reasons it has been able to grow steadily year after year. In its most recent earnings for second-quarter (Q2) fiscal 2025, CGI reported revenue of $4.02 billion, up 7.6% from the same quarter last year. Adjusted diluted earnings per share (EPS) also rose 7.6% to $2.12, and net earnings were $537.5 million. The company’s profitability continues to improve, with margins expanding thanks to its high-value digital services and automation efforts. What’s also impressive is its $30.99 billion backlog, which represents roughly twice its annual revenue.

CGI’s bookings this past quarter came in at $4.48 billion, with a book-to-bill ratio of 111.5%. That means it’s consistently bringing in more work than it delivers on the TSX today, a clear sign of growth and demand for its services. The company actively acquires smaller firms that strengthen its regional presence or enhance its capabilities in niche technologies. This buy-and-build strategy has worked well, helping CGI grow its footprint without overextending financially. And thanks to its strong free cash flow, it funds growth without diluting shareholders.

A perfect pairing

What really makes CGI a standout for a TFSA is how it balances growth with discipline. It’s not a flashy stock, and it doesn’t pay a dividend, but that’s not necessarily a drawback in a TFSA. Because the capital gains you earn inside the account are tax-free, holding a growth stock like CGI means you get the full benefit of compounding without giving any of it to the Canada Revenue Agency (CRA). That’s especially appealing if you have a long investment horizon and can let the gains build up over time.

Let’s say you invest $10,000 in CGI and the company grows by 10% annually for the next decade. Inside a TFSA, that entire return, more than doubling your money, would be yours to keep tax-free. If you compare that to holding a similar investment in a taxable account, where capital gains and dividends would slowly erode your returns, the value of a TFSA becomes crystal clear. CGI’s reliable performance gives investors confidence that it can deliver that kind of long-term compounding, especially given how integral technology is becoming to every sector.

It’s also worth noting that CGI focuses heavily on digital transformation, a trend that shows no signs of slowing down. Whether it’s artificial intelligence, cybersecurity, or cloud migration, businesses and governments alike are spending more to modernize operations. CGI’s expertise in these areas positions it well to benefit from ongoing tech investment, even in tougher economic conditions.

Bottom line

If you’re looking to invest TFSA savings today and want a stock that offers stability, steady growth, and the potential for strong compounding, CGI makes a strong case. It’s not the kind of stock that will double in a week on the TSX today, but it is the kind of business that quietly builds wealth year after year. That’s the real magic of a TFSA, finding companies like CGI and giving them time to grow tax-free without the need to watch the market every day. In a world full of uncertainty, that kind of consistency is worth holding onto.