If you’re investing in stocks through a Tax-Free Savings Account (TFSA), you can grow your money without ever worrying about taxes on capital gains or dividends. This gives a tremendous advantage, especially when you’re investing with a long-term mindset.
For 2025, the annual TFSA contribution room is $7,000, and if you plan to invest this amount in direct equity, here are three no-brainer, fundamentally strong Canadian stocks to buy now.
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goeasy stock
Offering growth, income, and value, goeasy (TSX:GSY) is a no-brainer Canadian stock for your TFSA portfolio. Notably, this leasing and lending services provider to non-prime borrowers has been steadily delivering double-digit growth in its revenues and earnings over the past five years. Thanks to its solid financial performance, the company rewarded its shareholders with solid capital gains and growing dividends.
Shares of goeasy have surged about 245% over the past five years, reflecting a compound annual growth rate (CAGR) of 28.1%. Besides significant capital gains, this subprime lender has increased its dividend for 11 consecutive years, making it a dependable income stock.
Moving forward, goeasy will continue to benefit from its scalable business model and expansion of its consumer loan portfolio. Further, its rising loan originations, diverse funding sources, strong underwriting practices, and improved operating efficiency will likely support its top and bottom-line growth.
Despite significant growth potential, goeasy stock remains undervalued. GSY stock is trading at a forward price-to-earnings (P/E) ratio of just 10, making the stock even more attractive at the current levels.
Its solid earnings growth potential, low valuation multiple, and growing dividend make it a perfect long-term bet.
Hydro One stock
Hydro One (TSX:H) is another no-brainer Canadian stock to add to your portfolio. Its regulated electricity transmission and distribution operations remain immune to the risks associated with power generation and commodity price swings. Thanks to its regulated operations, this utility company has been able to deliver steady earnings and predictable cash flows, resulting in returns that have outperformed the broader market.
For instance, Hydro One stock has grown at a CAGR of 16.5% over the last five years, delivering capital gains of 114.8%. In addition, Hydro One has increased its dividend at a CAGR of 5% over the past 8 years, while offering a yield of approximately 2.6% near the current market price.
The company is well-positioned to deliver solid total returns. Its low-risk earnings and expanding rate base augur well for growth. Hydro One expects its rate base to grow at a CAGR of 6% through 2027, which will result in annual earnings growth of 6–8%. This will support 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 will likely drive its financials and share price.
Dollarama stock
Dollarama (TSX:DOL) is a leading discount-chain operator that sells products at low and fixed price points. Its extensive range of consumable products and value pricing strategy consistently drives traffic and retention.
Despite its defensive business model, the retailer has outperformed the broader markets with its capital gains and has rewarded shareholders with higher cash. These attributes make Dollarama a no-brainer Canadian stock to own for decades.
Over the past five years, Dollarama’s share price soared about 286%. Further, it has raised its dividend 14 times since 2011.
Dollarama is poised to maintain its growth streak despite macro uncertainty. Its low pricing strategy, wide product range, and strong supply chain will continue to support revenue and earnings. Moreover, new store openings and international expansion will accelerate its growth, supporting dividend payments and share price.
