Canadians looking to grow their retirement savings have a number of different investing vehicles to choose from. Of course, there’s always a Registered Retirement Savings Plan (RRSP), individual brokerage accounts, and the Tax-Free Savings Account (TFSA).
Most personal finance experts point to the TFSA as one of the most powerful retirement savings tools, due to the fact that capital gains for investments held in this fund are not taxed at withdrawal (so long as investors pull out these funds after one hits retirement age). Accordingly, the common wisdom is that growth stocks should be the primary focus within TFSAs, and I think that’s generally true.
However, for long-term investors who are looking to steer a little more on the cautious side, here are two top stocks I think can be held in a TFSA for the long term.
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Enbridge
Pipeline giant Enbridge (TSX: ENB) is an excellent option for investors looking for a mix of value, growth, and dividend income over the long term.
Indeed, Enbridge’s total return profile over the long term has been historically impressive, with the company seeing a surge from around $40 per share to start 2024 to more than $60 per share today. That’s a meaningful return on the capital appreciation side for a company that traditionally is viewed as an income play.
On that front, Enbridge’s near-6% dividend yield is one I think is sustainable (and should grow) over time. Well covered by the company’s existing operations and world-class network of laid pipe, this is a top-tier blue chip stock I think is deserving of a place in a TFSA or RRSP, whatever your jam is.
Manulife Financial
Another top defensive stock with a growth tilt I think investors ought to consider right now is Manulife Financial (TSX: MFC).
Shares of the Canadian insurance giant have been on a similar tear over the past two years, more than doubling over this timeframe. That’s impressive, considering Manulife’s relatively slow-growth past (you will notice that MFC stock didn’t do much for the three years prior to 2022).
Like Enbridge, many investors view Manulife as a dividend play or bond proxy. With a well-covered 3.5% dividend yield and a trailing price-earnings multiple under 17 times, this is a stock that provides an excellent mix of value and capital appreciation upside (particularly in declining interest rate environments).
Those banking on some volatility ahead could do well with both picks.
