For 2025, the Tax-Free Savings Account (TFSA) contribution limit has been set at $7,000, offering Canadians an opportunity to grow their wealth without the burden of taxes. Notably, A TFSA is more than just an investment vehicle. It is a wealth-building tool. By holding top TSX-listed stocks within this account, investors can enjoy tax-free capital gains, dividend income, and even interest, allowing their money to work harder over time.
This tax advantage can significantly accelerate portfolio growth, as every dollar earned stays in your account, compounding year after year without being eroded by taxes.
So, if you plan to invest $7,000, here are two fundamentally strong Canadian stocks worth considering right now.
goeasy stock
goeasy (TSX:GSY) is a no-brainer stock for your TFSA portfolio, offering growth, income, and value. This Canadian subprime lender has been steadily delivering strong financial results while rewarding shareholders with both capital gains and growing dividends.
Over the past several years, goeasy has shown remarkable consistency in expanding its business. As of June 30, GSY’s revenue has grown at a compound annual growth rate (CAGR) of roughly 22.7%, while earnings have compounded at nearly 23% annually. That solid performance has translated into exceptional shareholder returns. Its stock price has surged about 290% in the last five years, which implies a CAGR of 31.2%.
Besides significant capital gains, goeasy has increased its dividend for 11 consecutive years, making it a reliable income stock.
The road ahead looks promising. As a provider of non-prime leasing and lending services, goeasy has built a scalable model that allows it to expand its consumer loan portfolio continually. This growth is supported by rising loan originations, a diverse range of funding sources, disciplined underwriting practices, and strong operating efficiency. Together, these factors create a foundation for ongoing profitable expansion.
Despite significant growth potential, goeasy stock offers considerable value. With a forward price-to-earnings ratio of just 9.9, goeasy trades at a valuation that doesn’t fully reflect its double-digit earnings growth potential.
This combination of strong fundamentals, solid prospects, a growing dividend, and low valuation makes goeasy a compelling investment.
Hydro One stock
Much like goeasy, Hydro One (TSX:H) is another top Canadian stock offering a compelling mix of stability, income, and growth potential. Its regulated electricity transmission and distribution operations remain immune to the risks associated with power generation and commodity price swings, which enable it to deliver steady earnings and predictable cash flows. This, in turn, results in higher returns.
Despite its conservative business model, shares of this utility company have grown at a CAGR of 16.4% over the last five years, delivering capital gains of 114.3%. Besides outperforming the TSX with its growth, Hydro One has consistently increased its dividend, enhancing its shareholder value, thanks to its low-risk and predictable earnings.
Currently, the company distributes a quarterly dividend of $0.33 per share, with a yield of approximately 2.6%. Moreover, Hydro One has raised its dividend at a 5% CAGR over the past eight years. With its expanding rate base, Hydro One is well-positioned to offer both income and growth. Its rate base is projected to grow at a 6% CAGR through 2027, which will result in annual earnings growth of 6–8%, supporting higher dividend payments. Management projects a 6% increase in its yearly dividend during the same period.
Further, its robust balance sheet and strong internally generated cash flows position it well to capitalize on growth opportunities. Also, tailwinds from growing electricity demand, driven by data centre expansion and population growth, will likely drive its financials and share price.
