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).
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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.
