The 1 Single Stock That I’d Hold Forever in a TFSA

Here is why this Canadian stock’s defensive business model makes it a compelling buy-and-hold investment for TFSA investors.

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Key Points
  • Dollarama Inc. is positioned as an ideal "forever stock" for TFSA investors due to its stable growth and defensive qualities, thriving across market cycles by providing essential goods at low prices, which secures steady revenue even in economic downturns.
  • With a proven track record, international expansion plans, including in Australia and Latin America, and a domestic growth target of increasing store count, Dollarama is set for long-term growth, making it a compelling addition to tax-free savings accounts.
  • 5 stocks our experts like better than [Dollarama Inc] >

If you have been investing in the stock market for a while, you might already be aware of the market’s cyclical nature. Several factors lead to bull market conditions and substantial downturns. So many high-growth stocks shine when the market conditions are just right, only to decline when the environment shifts.

Not every stock is worth holding through the market cycles, but there are some that you can buy and hold through all the economic slowdowns, rate cuts, and market cycles. These forever stocks can be excellent investments, especially for long-term investors in their Tax-Free Savings Accounts (TFSAs).

Between the power of tax-free compounding over the long run and the ability to withdraw funds without incurring taxes, the TFSA can be a great investment vehicle. Today, I will discuss what I feel is the ideal forever holding for TFSA investors: Dollarama (TSX: DOL).

Blocks conceptualizing Canada's Tax Free Savings Account

Source: Getty Images

Dollarama stock

Forever stocks must have qualities that make them good holdings for a long time. Stable growth and defensive qualities are some of the most important factors to consider. Dollarama is a stock that offers both, having shown its ability to deliver outstanding returns to investors through various market cycles and harsh economic environments.

Dollarama is a $53.73 billion market-cap Canadian company that owns and operates the country’s largest chain of discount retail stores. It provides everyday consumer products, general merchandise, and seasonal items at low fixed prices compared to other retailers. The company has around 1,600 stores in Canada, and the number keeps growing each year. Dollarama also has a significant presence in Latin America through Dollarcity, and it has recently entered the Australian market.

The company’s business model is simple: It offers items that consumers need at a lower price than they would get for them in other places. When the economy is not doing well, and people look to cut costs, Dollarama offers necessities at discounted rates to offer the help that people need. This allows Dollarama to generate significant revenues during periods that other retailers might suffer from significantly lower sales.

The third quarter of its fiscal 2026, which ended in October 2025, saw the company’s year-over-year revenue jump by 22.2%. The company’s adjusted quarterly earnings also increased by 19.4% in the same period. These two factors show that the company’s cost control is solid, and it is enjoying better operating profit margins. The company was doing so well in the quarter that it also bought back over $489 million worth of shares, strengthening the position of its investors.

Foolish takeaway

Dollarama’s stake in Dollarcity keeps paying off, and its expansion in Australia will likely set it up for immense growth in the short and long term. Dollarama’s management also plans to grow its domestic presence, aiming to reach 2,200 locations across Canada. Considering its solid fundamentals, it is well-positioned to deliver substantial returns in the long run.

If you have yet to use the additional contribution room in the 2026 TFSA update, I would advise you to seriously consider allocating some of it to hold Dollarama stock. It is one of the safest stocks to own for the long run in a TFSA.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Dollarama. The Motley Fool has a disclosure policy.

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