3 Canadian Stocks That Are the Best to Buy and Hold in a TFSA

Three “sleep well” TFSA stocks can come from boring, essential businesses: rail, insurance, and waste.

Key Points
  • Key Takeaways CNR has a hard-to-copy rail moat, and a recent dip could be a long-term entry point.
  • Intact Financial compounds through disciplined insurance underwriting and investment income, even when markets wobble.
  • Waste Connections is an essential services compounder with steady demand, though the valuation remains rich.

The best “buy and hold forever” Tax-Free Savings Account (TFSA) stocks share one trait: you can ignore the noise and still sleep. It sells something essential, it holds pricing power, and it reinvests without stretching the balance sheet. A TFSA rewards patience because every dollar of growth and every dividend stays yours, tax free. That makes quality matter more than hype. You want a business that can handle recessions, rate swings, and ugly headlines, then keep compounding anyway. So let’s look at three checking those boxes.

a woman sleeps with her eyes covered with a mask

Source: Getty Images

CNR

Canadian National Railway (TSX: CNR) runs a coast-to-coast rail network that moves grain, energy products, containers, and the everyday stuff Canadians buy without thinking about it. It benefits from a natural moat because building a rival rail network costs a fortune and takes decades. The Canadian stock has bounced around this year. Over the last year, shares have dropped about 10%, yet that could be a good opportunity to jump back in.

CNR’s latest quarter showed steady execution, not magic. In the third quarter of 2025, it reported revenue of $4.2 billion and net income of $1.1 billion, with diluted earnings per share (EPS) of $1.83. It also improved its operating ratio to 61.4%, which points to tighter costs. Management set a 2026 capital plan of $2.8 billion, down about $600 million, and that should support free cash flow. The main risk comes from weaker volumes if the economy slows, or from labour and fuel costs that squeeze margins. Yet today, you can pick it up with a 2.6% dividend yield trading at just 18.2 times earnings.

IFC

Intact Financial (TSX: IFC) sells property and casualty insurance across Canada, the U.S., and the U.K. It earns money in two ways: underwriting discipline and investment income on premiums it holds. That mix can look dull, but it can also look brilliant in a TFSA. Over the last year, shares were up about 7.5%, though there has been a bit of a dip over the last six months. This shows investors still pay for consistency.

The numbers support that confidence. In Q3 2025, Intact reported net operating income per share of $4.46, with earnings per share (EPS) of $4.73, and it posted a combined ratio of 89.8%. It also reported operating return on equity (ROE) of 19.6% and book value per share of $103.16, up 14% year over year. Meanwhile, the dividend stock trades at 16.6 times earnings at writing, with a 2% dividend yield. The outlook hinges on premium growth and steady claims trends. A nasty catastrophe year can still dent results, even for a best-in-class insurer.

WCN

Waste Connections (TSX: WCN) collects, transfers, and disposes of non-hazardous waste across North America. That sounds unglamorous, which helps. People and businesses create waste in good times and bad, so demand stays steady and pricing tends to stick. The TSX-listed shares have cooled off lately. Over the last year, shares are down about 6%, trading at 70 times earnings. So it could be a good time to jump back into the stock.

Its recent quarter showed why the market treats it like a compounder, even with a small dividend. In Q3 2025, it reported revenue of $2.5 billion, adjusted EPS of $1.44, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $830.3 million, with an adjusted EBITDA margin of 33.8%. Integration risk rises if it buys too aggressively, and regulators can raise costs over time.

Bottom line

Put these three together and you get a TFSA-friendly mix – a rail giant with a moat, an insurer with disciplined earnings, and a defensive services compounder. None need perfect markets to work. Each one can grow cash flow, pay a dividend, and reinvest for the next decade. In fact, here’s what all three dividend stocks could earn from $7,000 in each.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENT
CNR$137.8950$3.55$177.50Quarterly$6,894.50
IFC$279.2125$5.32$133.00Quarterly$6,980.25
WCN$233.2530$1.97$59.10Quarterly$6,997.50

If you want “forever” stocks, start with businesses you would feel comfortable owning through a full market cycle, then let the TFSA continue to do the quiet work for patient Canadian investors.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Canadian National Railway and Intact Financial. The Motley Fool has a disclosure policy.

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