The Tax-Free Savings Account (TFSA) limit for 2025 remains unchanged at $7,000. The TFSA allows your investment to grow tax-free and even allows you to withdraw tax-free, making it an ideal account for high-growth, high-dividend stocks. If you max out on the $7,000 limit, you can generate a sizeable passive income as well as increase the portfolio value.
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Top stocks to consider for the $7,000 TFSA contribution
The tariff volatility and the Bank of Canada’s interest rate cuts have created an environment of both risk and opportunity. Here are a few stocks you could consider investing in through a TFSA and benefit from the opportunity rate cuts bring.
Constellation Software
The resilient growth stock that uses the power of compounding to increase its share price is trading at a discount. Constellation Software (TSX:CSU) stock price dipped 17% from its 52-week high of $5,300 and is trading near $4,353. It is just 6% above its 52-week low of $4,092.70. Behind the dip is a weaker second-quarter earnings, where it reported a 68% year-on-year decrease in net income due to a US$118 million foreign exchange loss.
While such short-term volatility will continue to pull the stock down, the compounding effect will drive long-term growth. Here’s how.
Constellation acquires vertical-specific software companies offering mission-critical applications worldwide. It looks for companies with little competition and recurring cash flow from maintenance contracts. The business model increases its return on investment (ROI) as the company uses the cash flow of acquired companies to acquire more and grow new cash flow streams. Sometimes, Constellation also uses debt to fund its acquisition, but keeps the leverage manageable.
Every new acquisition increases the value of the enterprise and is accretive to its cash flow. There are periods of downturn when its earnings per share (EPS) and free cash flow (FCF) fall. For instance, its EPS and FCF fell 29% and 10%, respectively, in 2021 because it spun off Total Specific Solutions and acquired Topicus.com. However, Constellation’s share price has surged 87% between 2022 and August 2025.
The recent price correction is a buying opportunity as its value corrected to 35 times its forward price-to-earnings (P/E) ratio and a 6.24 times price-to-sales ratio. This ratio justifies the 23.9% average annual growth rate in EPS and 18.5% in revenue. You can expect the stock to grow at a 20% annual growth rate and double your investment in five years.
goeasy
goeasy (TSX:GSY) stock has already surged 49.5% from its April 7 dip. The first week of April was a turning point for the TSX as the White House clarified that the tariffs do not apply to the United States-Mexico-Canada Agreement (USMCA) goods and services. The tariff war has no direct impact on the non-prime lender, goeasy. However, the USMCA clarity was a factor that encouraged the Bank of Canada to pause interest rate cuts. Many Canadians had delayed taking loans on the anticipation of rate cuts, and the rate cut pause triggered this loan activity.
goeasy reported a record volume of loan applications in the second quarter of 2025, which increased its loan portfolio by 9% to $5.1 billion. However, its loan yield reduced to 31.8% from 33.9% a year ago due to a higher number of low-yield secure loans and the implementation of the 35% interest rate capping on January 1, 2025.
While the yield fell, loan volume picked up, and the charge-off rate fell to 8.8% from 9.36% a year ago. The improvement in the quality of the loan portfolio is reflected in goeasy’s share price. There is more upside to the stock as the loan activity recovery has just begun.
You could consider investing $2,500 in this stock and participating in the recovery rally. Moreover, you can also benefit from its 30% dividend annual compounded growth rate (CAGR). The lender could continue growing dividends in the coming 10 years as the lender grows its loan portfolio and the dollar value of the interest earned.
TFSA tip
Investing in a single stock of Constellation Software for $4,353 and the remaining $2,500 in goeasy can give you a good balance of wealth and passive income. You can also use the dividend money from goeasy to invest in other high-growth stocks, without affecting your TFSA contribution room.
