Over the years, many Canadian stocks have proven to be powerful wealth builders, rewarding investors with exceptional long-term returns. These TSX stocks are backed by fundamentally strong businesses, solid management, and the ability to grow consistently through different market cycles. By investing in a diversified mix of such stocks across multiple sectors, investors can reduce overall risk and enjoy solid gains.
Further, holding them within a Tax-Free Savings Account (TFSA) can significantly boost your real returns over time. Inside a TFSA, every dollar of capital gains and dividend income grows entirely tax-free, allowing investors to keep all their profits and reinvest them to compound wealth faster. This combination of quality Canadian stocks and the TFSA’s tax-free structure can be a powerful engine for creating wealth in the long run.
Against this backdrop, here are two Canadian stocks I’d happily buy and hold for the long term.
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TFSA stock #1: Dollarama
Dollarama (TSX:DOL) is one of the top Canadian stocks I’d happily buy and hold in a TFSA for life. Shares of this leading value retailer offer stability, growth, and income, making it a compelling long-term investment. The retailer offers a wide range of consumable goods, general merchandise, and seasonal products, both private label and national brands, at low and fixed price points. This value pricing strategy keeps customers coming back, driving strong comparable store sales that, in turn, support rising profits, consistent dividend growth, and a share price increase.
Over the past five years, Dollarama has been a star performer on the TSX. Its shares have surged more than 294%, representing a compound annual growth rate (CAGR) of 31.6%. Beyond its stock price appreciation, the company has also rewarded investors with dependable income, having raised its dividend every year since 2011.
Looking ahead, Dollarama’s momentum shows no signs of slowing. Its defensive business model provides a cushion during economic uncertainty. At the same time, the retailer’s ability to open new stores with a quick payback period and minimal maintenance costs makes its growth sustainable and capital-efficient.
Dollarama is adapting to evolving shopping habits. Its growing presence on third-party delivery platforms adds convenience for customers and incremental sales potential. Meanwhile, its flexible product mix, which includes both branded and private-label offerings, bodes well for growth. Moreover, its direct sourcing further enhances its bargaining power with suppliers, helping to control costs and protect margins.
With a solid domestic business and international footprint, Dollarama is well-positioned to deliver consistent growth and attractive returns in the years to come.
TFSA stock #2: Shopify
Shopify (TSX:SHOP) is one of the most compelling long-term growth plays for TFSA investors. Over the past decade, shares of this omnichannel commerce platform provider have skyrocketed by about 5,401%. Moreover, it still has significant upside potential as retail continues to evolve toward a multichannel and digital-first model, driving demand for its products and services.
The company’s unified commerce platform is experiencing strong adoption among merchants of all sizes, ranging from small businesses to global brands. Further, Shopify’s focus on innovation, including the addition of new tools and features, keeps it ahead of rivals and deepens customer loyalty.
For Shopify, growth opportunities are multiplying beyond online retail. Shopify’s offline and business-to-business (B2B) segments are experiencing significant growth. In the latest quarter, offline gross merchandise volume jumped 31%, while B2B GMV soared 98% year over year, nearly doubling for a third straight year. These results underscore Shopify’s success in diversifying its revenue streams and solidifying its presence across the broader retail landscape.
With strong tailwinds from digital adoption, AI integration, and continued market share gains across multiple retail channels, Shopify’s momentum appears durable. Its growing merchant base and management’s focus on efficiency and profitability position it well to deliver outsized returns in the long term.
