Over the years, many Canadian stocks have delivered above-average total returns and helped long-term investors build substantial wealth. The key is to focus on high-quality businesses with solid fundamentals and strong growth prospects, then hold them for the long haul.
Moreover, diversification is an important part of the equation. Spreading investments across different sectors can help manage risk and balance the potential for stability with opportunities for growth. Further, if those investments are made within a Tax-Free Savings Account (TFSA), the benefits can be even greater as capital gains and dividend income can grow completely free from taxes.
Within this framework, here are three top TSX stocks I’d buy and hold forever. These stocks have the potential to deliver above-average returns in the long run.
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Dollarama stock
Dollarama (TSX:DOL) is one of Canada’s most reliable long-term stocks, offering stability, growth, and income. This leading discount-chain operator sells a wide range of consumables, general merchandise, and seasonal products at low and fixed price points. This value pricing strategy has kept customers loyal through both strong and uncertain economic times, making Dollarama stock a no-brainer investment in all economic conditions.
While the retailer operates a defensive business model, it has outperformed the broader markets with its capital gains. Over the past five years, its share price has soared about 298%, translating to a compound annual growth rate (CAGR) of about 31.7%. The company’s commitment to shareholders is equally strong, with 14 dividend increases since 2011.
Looking ahead, Dollarama’s value pricing strategy, wide product range, e-commerce partnerships for same-day delivery, and expansion of stores will help deliver solid growth. Moreover, its focus on acquisitions and international expansion will accelerate its growth, supporting its dividend and share price.
Celestica stock
Celestica (TSX:CLS) is another top Canadian stock to buy and hold forever while capitalizing on the artificial intelligence (AI) boom. The manufacturing and supply chain solutions provider is experiencing robust demand from hyperscaler clients for its Hardware Platform Solutions (HPS) networking products. With AI infrastructure investment accelerating, Celestica is ramping up multiple 800G networking programs in the HPS segment while maintaining strong sales in its 400G line.
The company’s revenue mix is also shifting toward higher-margin HPS products, supported by efficiency gains, which should boost profitability. Beyond AI, Celestica’s Advanced Technology Solutions (ATS) division, including Aerospace and Defence, HealthTech, Industrial, and Capital Equipment, is steadily growing and diversifying its revenue base.
With expanding opportunities in AI and steady growth in diversified sectors, Celestica’s strategic positioning makes it a compelling buy-and-hold choice for long-term investors.
Shopify stock
Shopify (TSX:SHOP) is another compelling long-term bet. The Canadian tech giant is consistently growing its gross merchandise volume (GMV), revenue, and free cash flow, driven by its ability to expand its merchant base, attract larger retailers, and continually broaden its suite of products and services.
The company is also uniquely positioned to benefit from the accelerating shift toward omnichannel selling platforms. Shopify’s unified commerce platform is resonating with a broader range of businesses, driving growth across multiple industries. Its push into the business-to-business (B2B) market and expansion into offline retail further enhance its growth potential.
Shopify is focusing on cost efficiency to deliver profitable growth in the long term. At the same time, it continues to invest in high-potential areas, including its core platform, AI, enterprise solutions, and international markets. This combination of operational strength and investments in growth initiatives positions it well to deliver solid returns in the long term.
