Building wealth over time can feel like a slow, uncertain climb – especially when markets swing and headlines shift very quickly. But for Canadian investors, the Tax-Free Savings Account (TFSA) quietly changes the game as it offers the ability to grow investments without worrying about taxes eating into their gains.
This way, you don’t need to take huge risks or be a market expert. Because when you buy a great company, you’re becoming a part-owner – and that’s where real wealth is created. In this article, I’ll highlight two of the best Canadian stocks with strong business models, consistent profitability, and a history of rewarding TFSA investors.
Source: Getty Images
Loblaw stock
Loblaw Companies (TSX: L) is far more than just a grocery chain. It’s a diversified retail powerhouse with operations spanning grocery, pharmacy, health and beauty, apparel, financial services, and wireless services.
The stock currently trades at $63.09 per share with a market cap of $73.8 billion. Over the past year, it has delivered a solid 28% return. It also pays a quarterly dividend with an annual yield of 0.9%.
Despite macroeconomic and geopolitical uncertainties, Loblaw continues to focus on strong execution. In its latest earnings report, the company posted a 10.9% YoY (year-over-year) increase in its adjusted earnings per share. Meanwhile, its revenue rose more than 11% from a year ago to $16.4 billion, driven mainly by growth in both food and drug retail segments.
At the same time, its e-commerce sales climbed nearly 20% YoY, showing its continued push into digital. The company is also expanding its store network and investing in automation to improve efficiency.
Loblaw is making strategic moves for the future as well, including the sale of PC Financial to EQB, which will streamline its operations and strengthen its partnership with the PC Optimum program. Overall, its focus on sustainability and operational efficiency further supports its long-term outlook.
Mullen Group stock
Mullen Group (TSX: MTL) may not be as widely known, but it plays an important role in North America’s transportation and logistics industry. The company provides services such as less-than-truckload shipping, warehousing, specialized transportation, and environmental solutions.
MTL stock currently trades at $16.75 per share with a market cap of $1.6 billion and has gained 29.8% over the past year. One of its biggest attractions is its dividend. Mullen pays a monthly dividend with a 5% yield.
In the fourth quarter, Mullen reported revenue of $533.8 million. However, its operating profit before depreciation and amortization (OIBDA) declined to $73.4 million, due mainly to weakness in its Specialized & Industrial Services segment.
That said, the company has been actively offsetting these pressures through acquisitions like Cole International and Pacific Northwest Moving, which have supported its revenue growth.
Going forward, Mullen is focused on expanding its services, improving efficiency, and benefiting from long-term demand for logistics. Its diversified operations help provide stability, even in a cyclical industry.
Given these solid fundamentals, these stocks could be solid long-term options for TFSA investors looking to build wealth over time.
