When you’re investing for the long haul and building a portfolio in your TFSA, you don’t want to just find Canadian stocks to buy that have compelling growth potential. You want to find businesses that you can have the confidence to stick with through different market environments.
That might sound simple, but it’s often not as easy as it seems because eventually most stocks will give you a reason to second-guess them.
Whether it’s volatility, slowing growth, or shifts in the broader economy, there’s usually something that forces investors to constantly re-evaluate their position, which is exactly what you want to avoid in a long-term TFSA portfolio.
It’s important to remember that the whole point of the TFSA isn’t just the tax-free gains; it’s using those tax-free gains to let high-quality businesses compound for years without interruption.
That’s why these three Canadian stocks are some of the best to consider for a long-term buy-and-hold TFSA.
Source: Getty Images
Two of the best core portfolio stocks Canadians can buy in their TFSAs
There’s no question that one of the best places to start when building a long-term portfolio is with businesses that generate predictable cash flow from essential services, like Enbridge (TSX: ENB).
Enbridge operates one of the largest energy infrastructure networks in North America, moving oil and natural gas across the continent.
Furthermore, it generates the majority of its cash flow through long-term contracts and regulated assets, which makes its earnings far more predictable.
That’s why it has been able to consistently generate reliable cash flow and support one of the most attractive dividends on the TSX. In fact, not only does the dividend offer a current yield of 5.3%, but it has also been increased every year for more than three straight decades.
Most importantly, though, it’s a business that continues to perform regardless of short-term market conditions since its operations are essential.
So, if you’re building a long-term portfolio in your TFSA, there’s no question Enbridge is a top pick.
In addition to Enbridge, another massive blue-chip stock that dominates its industry and continues to perform regardless of short-term conditions is Nutrien (TSX: NTR).
As one of the largest agricultural input companies in the world, Nutrien plays a critical role in global food production.
Farmers rely on fertilizers to maintain crop yields, and as the global population continues to grow, that demand continues to increase.
And while Nutrien can be more cyclical than a stock like Enbridge, especially since fertilizer prices can fluctuate, the long-term demand for its products remains strong. On top of that, Nutrien has vertically integrated its business in recent years, which helps it better manage some of that cyclicality.
And because of that solid business model and consistent cash flow generation, Nutrien returns a significant amount of capital to shareholders through dividends and share buybacks.
That combination of essential demand, strong cash flow, and the ability to return capital to shareholders is exactly what makes Nutrien one of the best Canadian stocks to buy and hold in your TFSA.
A defensive growth stock that continues to execute
Finally, one of the most underrated types of long-term investments is businesses that offer steady, defensive growth, like Jamieson Wellness (TSX: JWEL).
Jamieson operates in the health and wellness space, producing vitamins, supplements, and other consumer health products where demand is both recurring and relatively resilient.
Consumers don’t suddenly stop buying health products because of short-term economic changes, which helps provide a stable base of revenue.
At the same time, Jamieson continues to grow by expanding its product offerings and increasing its presence in international markets.
That combination of steady demand and consistent execution is what allows it to deliver reliable growth over time.
And while it may not be the fastest-growing stock on the TSX, it’s compelling because it’s reliable and consistent. That’s what makes it one of the best Canadian stocks to buy and let quietly compound in a TFSA for years.
