Long-term Investors looking for top-quality Canadian growth stocks to own have come to the right place.
The reality is that when investing in one’s Tax-Free Savings Account (TFSA), a Roth-like investment vehicle available to Canadian investors, the stocks one picks to put in such a fund matter. Indeed, this fund is best-served holding the sorts of long-term winners one expects to see over time.
And while the U.S. market (and other markets for that matter) have tended to produce some of the best long-term winners in the tech sector, there are some fantastic investing options closer to home. Here are two of my top Canadian growth/tech picks I think investors should be considering as part of their TFSA investing strategies right now.
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Shopify
It should be no surprise to most investors that e-commerce platform giant Shopify (TSX: SHOP) is atop my list of top Canadian growth stocks to consider for a TFSA.
Indeed, looking at the company’s long-term chart (and I’d recommend zooming out on the chart above), it’s clear that Shopify has provided the kind of strong growth that long-term investors who put capital to work in this name more than a decade ago when it went public enjoyed.
Much of this has to do with underlying strength within the e-commerce sector and strong secular trends driving this growth that I think will continue for some time to come. Whether it’s small, medium or mega-cap companies, having a solid online presence is important. Reaching consumers directly with whatever offering is at play is becoming essential. Shopify’s platform provides that kind of online access at a very reasonable cost and is among the best purveyors in this space.
For those thinking long term, Shopify’s growth rate (which could accelerate due to various AI implementations of late) looks attractive relative to the company’s valuation. This isn’t a cheap stock by any stretch, but compared to many large-cap U.S. tech stocks, it is cheap. On that basis, Shopify remains a buy in this current market for those looking for long-term growth in their TFSAs.
Constellation Software
Another one of my top (seemingly perennial) picks in the world of Canadian growth stocks is Constellation Software (TSX: CSU).
Indeed, Constellation Software remains one of the largest and perhaps most under-the-radar growth stocks in the Canadian tech sector, and I’d argue it should get more attention from international investors. I think the reason Constellation continues to fly under the radar to the degree it does is that this is a company that’s solely listed on the TSX (can be found on the pink sheets in the U.S.). Thus, one simple strategy I think could open up a flood of institutional capital into this name would simply be to dual list the company south of the border.
That said, until that happens, I think investors would do well to consider buying this stock on any significant selling pressure. Indeed, such a strategy in 2022 would have paid off handsomely, with CSU stock more than quadrupling off its low at that point in time.
Given the company’s growth-via-acquisition strategy and the seemingly endless list of small and mid-cap companies in high growth sectors for Constellation to choose from, this company remains a top pick of mine in this current environment.
