If you could own just one stock in your Tax-Free Savings Account (TFSA) forever, TMX Group (TSX:X) deserves serious consideration. The Canadian stock is a bet on the infrastructure that powers Canada’s capital markets.
TMX stock delivered one of its best years on record in 2025. And the company is just getting started.
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TMX Group is the backbone of Canadian capital markets
Most investors know the Toronto Stock Exchange as the place where stocks trade. What many miss is how much more TMX actually does.
The company runs the TSX and the TSX Venture Exchange. It also operates the Montreal Exchange for derivatives, the Canadian Derivatives Clearing Corporation, CDS Clearing for settlement, TMX Trayport for European energy trading, and TMX VettaFi for index and analytics products. Additionally, it owns Newsfile, a news dissemination service. The exchange collects fees and subscriptions from trading activity across business cycles.
At TMX’s May 2026 annual meeting, CEO John McKenzie confirmed the company delivered exceptional results across every quarter of 2025.
- TMX grew sales by 18% year over year after accounting for acquisitions.
- If we exclude inorganic growth, revenue growth stood at 15%.
- It ended 2025 with an adjusted earnings per share of $2.13, up 25% year over year.
- Its income from operations also rose by 20% to $771 million in 2025.
The Montreal Exchange was the growth engine, as derivatives trading and clearing revenue soared 31%. Volume traded across TSX, TSX Venture, and Alpha Exchange combined rose 27% over the prior year. The TSX Venture Exchange reported a 45% surge in volume.
TMX VettaFi, the company’s index and analytics business, grew revenue 24% year over year in Canadian dollars. TMX Trayport, which serves European energy markets, grew 18%.
These numbers reflect a business that is expanding its competitive moat year after year.
Why TMX is a top stock to own in the TFSA
A TFSA works best when it holds quality compounders. You pay no tax on dividends or capital gains, making every percentage point of return work harder for you.
TMX checks every box a long-term TFSA investor should want. The company targets double-digit growth in adjusted earnings per share over the long term. It maintains a dividend payout ratio between 40% and 50% of adjusted earnings per share. In 2025, TMX returned $233 million to shareholders through dividends, or $0.84 per share.
Valued at a market cap of $14.6 billion, TMX stock has returned 414% to shareholders. If we adjust for dividends, cumulative returns are closer to 550%.
In February 2026, TMX launched a normal course issuer bid to repurchase approximately 1% of its outstanding shares, a key signal of financial discipline and confidence in future cash generation.
The recently announced deal to acquire CBOE Australia and CBOE Canada would create a stronger domestic champion while opening the door to a high-growth international market. McKenzie called it an opportunity the company simply could not pass up.
Canada’s mining sector crossing $1 trillion in market capitalization in 2025, a record 239 new ETFs listed on the TSX in a single year, and surging financing activity in the second half of 2025 all point to an ecosystem that is getting stronger, not weaker.
Is the TSX dividend stock still undervalued?
Analysts forecast TMX to increase revenue from $1.7 billion in 2025 to $2.1 billion in 2028. In this period, free cash flow is projected to expand from $643.6 million to $806.4 million.
If the TSX dividend stock is priced at 20 times forward FCF, which is similar to its 10-year historical average, it could gain 13% over the next 18 months, after adjusting for dividends.
