The Canadian equity markets experienced significant volatility last week, with the S&P/TSX Composite Index hitting a new high on Wednesday before dropping more than 1.8% on Thursday. In this environment of heightened uncertainty, TFSA (Tax-Free Savings Account) investors should remain cautious. A decline in stock values, followed by selling, could not only erode capital but also reduce their available contribution room. With this in mind, here are three top TSX stocks that are well-suited for a TFSA portfolio.
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Fortis
Fortis (TSX: FTS) is one of the most reliable stocks to hold in your TFSA, thanks to its stable and predictable financial performance, strong growth outlook, and long track record of consistent dividend increases. The company operates 10 regulated natural gas and electric utility businesses across the United States, Canada, and the Caribbean, serving approximately 3.5 million customers. With 99% of its assets regulated and 93% tied to transmission and distribution, Fortis’s earnings are less prone to economic cycles and market volatility.
Backed by this stability, Fortis has delivered an impressive annualized return of 9.84% over the past 20 years. The company has also increased its dividend for 52 consecutive years and currently offers a forward yield of 3.49%. On the growth front, Fortis is on pace to invest $5.6 billion this year, having deployed $4.2 billion in the first three quarters. It has also unveiled a new five-year capital plan worth $28 billion, which can expand its rate base to $57.9 billion by 2030.
Supported by these expansion initiatives, management expects to grow its dividend at an annualized rate of 4–6% through 2030, making Fortis a compelling long-term addition to your TFSA.
Waste Connections
Another reliable stock that I believe would make an excellent addition to your TFSA is Waste Connections (TSX: WCN), a leading provider of solid waste management services in the United States and Canada. The company primarily operates in secondary and exclusive markets, allowing it to face less competition and maintain higher margins. It has also expanded its business through a combination of organic growth and strategic acquisitions. Since 2020, Waste Connections has completed over 100 acquisitions, adding more than $2.2 billion to its annualized revenue. Supported by these initiatives and consistent financial growth, the Toronto-based company has generated an impressive annualized return of 12.5% over the past 20 years.
Looking ahead, WCN plans to sustain its acquisition-driven growth strategy, backed by strong financial performance and robust cash flows. The company is also leveraging technology to enhance customer experience, improve operational efficiency, and strengthen its profitability. Additionally, declining voluntary employee turnover—driven by improved engagement programs and better safety metrics—is contributing to margin expansion. The company recently increased its dividend by 11.1%, marking its 15th consecutive year of double-digit dividend growth, and currently offers a forward yield of 0.83%.
Given these strengths, I expect Waste Connections to maintain its positive financial trajectory despite challenges in recycled commodity pricing, making it a compelling long-term buy for TFSA investors.
Dollarama
Dollarama (TSX: DOL) is a discount retailer that consistently delivers strong same-store sales growth, regardless of macroeconomic conditions. Its efficient direct-sourcing model and streamlined logistics help keep costs low, enabling the company to offer a wide range of consumer products at competitive prices. Dollarama has also steadily expanded its footprint, supporting robust financial growth and fueling a remarkable stock performance—delivering returns of over 585% over the past decade, or an annualized rate of 21.2%.
Looking ahead, the company continues to pursue an aggressive expansion strategy. It plans to increase its Canadian store count from 1,665 to 2,200 and its Australian locations from 395 to 700 by the end of fiscal 2034. Given Dollarama’s capital-efficient and growth-oriented business model, rapid sales ramp-up, and low maintenance capital requirements, these expansions are well-positioned to enhance both revenue and profitability.
Meanwhile, its subsidiary Dollarcity—currently operating 658 stores across Latin America—aims to grow its network to 1,050 stores by the end of fiscal 2031. Dollarama also has the option to increase its ownership stake in Dollarcity from 60.1% to 70% by 2027. Considering the company’s strong fundamentals, proven growth strategy, and continued expansion prospects, Dollarama stands out as an excellent addition to a TFSA portfolio.
