Many Canadian stocks have delivered above-average total returns in the long term, creating significant wealth for their shareholders. These are companies with solid fundamentals and strong growth prospects. By spreading investments across these stocks and different sectors, one can reduce risk and smooth out returns, even when certain parts of the market face challenges.
Further, if these TSX stocks are held inside a Tax-Free Savings Account (TFSA), the rewards become even more attractive. Within a TFSA, all capital gains and dividend income grow completely tax-free, allowing investors to keep more of what they earn and accelerate wealth creation.
With that strategy in mind, here are three top Canadian stocks I’d buy and hold forever.
Shopify stock
Shopify (TSX:SHOP) is one of the top TSX stocks to buy and hold forever, thanks to its proven ability to generate outsized returns. Over the past decade, the e-commerce platform provider has delivered about 5,294% gain, and despite this meteoric rise, its growth trajectory is far from over. The global shift toward digital and multichannel retail continues to accelerate, positioning Shopify to benefit from a significant growth opportunity.
The Canadian tech giant’s unified commerce platform attracts merchants of all sizes, with large retailers increasingly adopting its tools to power online and offline sales. Further, its focus on innovation and new product launches positions it well to capitalize on opportunities stemming from digital transformation. In addition, Shopify is focusing on operational efficiency to deliver sustainable profitability in the long term.
Shopify is also expanding into offline and business-to-business markets, with strong growth in gross merchandise volume from these channels. By diversifying its reach and strengthening its ecosystem, Shopify continues to strengthen its position in omnichannel commerce, making it a solid stock to hold for the long term.
Dollarama stock
Dollarama (TSX:DOL) is a top TSX stock to buy and hold forever. It offers a mix of stability, growth, and income. It operates a discount retail chain, selling products at low and fixed price points. Its value pricing strategy and a vast range of consumable products enable Dollarama to drive traffic, retain customers, and deliver steady comparable sales growth in all market conditions.
While Dollarama operates a defensive business, the retailer has consistently outperformed the Canadian benchmark index by a wide margin. For instance, Dollarama stock has jumped about 263% over the past five years, reflecting a compound annual growth rate (CAGR) of 29.4%. Further, it has raised its dividend every year since 2011.
Dollarama will likely maintain its growth trajectory in the coming years. Dollarama’s strong supply chain, value pricing, and expansive product range position it for continued growth. New store openings and international expansion further bolster its prospects, supporting revenue, dividend, and share price growth.
Enbridge stock
Enbridge (TSX:ENB) is a dependable long-term stock for income and growth. This North American energy infrastructure giant operates oil and gas pipelines, natural gas utilities, and renewable energy projects. The company’s diversified operations and high system utilization enable it to generate steady distributable cash flow (DCF), supporting higher dividend payments and growth.
Notably, 98% of ENB’s EBITDA stems from regulated operations or long-term contracts. Regulatory safeguards and low-risk commercial arrangements insulate its profits, allowing dividends to grow even during economic turbulence. Thanks to its resilient earnings and DCF, Enbridge raised its dividend for 30 consecutive years at a CAGR of 9%.
Enbridge is well-positioned to keep growing its dividend. Moreover, its financials and stock price are likely to get a boost from rising demand for energy, led by data centre projects and energy transition opportunities. In short, Enbridge is a dependable income stock with long-term growth potential.
