The TFSA (Tax-Free Savings Account) is the ultimate tool for creating wealth with stocks. There is no better place to invest than a place that is completely insulated from tax. You pay no tax on your TFSA income and you pay no tax when you withdraw from the TFSA.
As a result, it is a really flexible registered account. Since you pay no tax, even a modest investment (like $500) can grow to become something substantial. If you are looking for some TFSA stock ideas that could multiply $500 over time, here are a couple to buy right now.
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A space company worth holding tax-free for a decade
MDA Space (TSX:MDA) might be up 58% this year, but there could still be more upside for this stock. MDA is a leading provider of satellite constellations, space components, robotics, and geo-intelligence. A new space race is in full flight. That is fueling substantial opportunities for MDA.
Space launch costs have rapidly come down in recent years. There is robust demand to get low-orbit satellite constellations into space. Companies are looking to expand their communication networks around the world, and that is fuelling strong satellite demand.
That demand has been dropping in MDA’s backlog after some big contract wins this year and last. It will have over $5 billion of backlog as we move into the third quarter. Its current backlog alone will fuel several years of double-digit growth ahead.
Last year, MDA grew revenues by 33%, earnings before interest, tax, depreciation, and amortization (EBITDA) by 23%, and diluted earnings per share by 50%. This year, MDA is guiding for a midpoint of 48% revenue growth and 45% adjusted EBITDA growth.
I wouldn’t say that its stock is cheap today. It trades with a price-to-earnings ratio of 50 and an enterprise value-to-EBITDA ratio of 25.
It is best to buy it on a dip. The stock has been volatile, so there are always opportunities. However, if its strong growth rate can persist, there could still be more upside ahead.
A top long-term software stock to hold in a TFSA
With a market cap of $13.8 billion, Topicus.com (TSXV:TOI) might be the largest stock on the TSX Venture Exchange. It may not be a well-known name in Canada. However, it operates many crucial vertical market software businesses in Europe.
It’s a resilient business because it is diversified across countries, sectors, and industries. It happens to have a focus on government, banking, healthcare, and education. All of these are very stable market segments.
The company has delivered strong returns in 2025. Its stock is up 36% this year, despite a recent pullback. Topicus has made some big acquisitions in the year. That has helped drive 18% revenue growth (4% organic) and 11% free cash flow growth in the first six months of the year.
While Topicus’s valuation is expensive today, it does look better after the recent pullback. If Topicus can even mirror half the returns of its parent company, Constellation Software, long-term investors will be very happy. Buying it on dips is a great opportunity to build a position.
