Taxes are often one of the biggest factors that investors have to consider when investing, since they can be such a drag on your portfolio. That’s why many investors recognize just how powerful the TFSA can be, especially when you use the account to buy high-quality Canadian stocks that you plan to hold long term.
The TFSA’s tax-free nature and long-term compounding power are also why one of the simplest ways to use it is by buying strong businesses and holding them for years as they continue to grow and compound over time.
That’s why focusing on high-quality companies with stable and consistent growth backed by strong business models is one of the simplest and most effective strategies that investors can use.
So, if you’ve got cash in your TFSA that you’re looking to put to work, here are three of the best Canadian stocks on the TSX to buy now and hold for the long haul.
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One of the best defensive growth stocks on the TSX
There’s no question that one of the best Canadian stocks that’s perfectly suited for a long-term buy-and-hold strategy in your TFSA is Brookfield Infrastructure Partners (TSX: BIP.UN).
Brookfield is a global infrastructure company that owns a wide range of assets, including utilities, transport networks, energy infrastructure, and data-related assets.
What makes the business so attractive for long-term investors is how diversified it is. It operates across different regions and industries, which helps reduce risk while still allowing it to benefit from multiple long-term growth trends. Plus, infrastructure assets consistently generate stable, long-term cash flow because they provide essential services.
Furthermore, Brookfield doesn’t just own a portfolio of cash flow-generating assets. It’s constantly selling off mature assets and recycling that capital into new opportunities.
That’s what creates so much long-term growth potential for investors, and why it’s the perfect Canadian stock to buy and hold in your TFSA.
It currently yields 4.7%, increases that distribution annually, and is one of the best long-term compounding stocks on the TSX.
The perfect core portfolio stock
In addition to Brookfield Infrastructure, another high-quality Canadian stock to buy and hold for years in your TFSA is Canadian National Railway (TSX: CNR).
Canadian National Railway is one of the most important rail networks in North America because it has a massive intercontinental network that connects key parts of the economy.
And because rail infrastructure is incredibly difficult and expensive to replicate, it gives the company a strong competitive position.
Additionally, the business also benefits from consistent demand. No matter what’s happening in the economy, goods still need to be transported, whether it’s raw materials, consumer products, or industrial inputs.
On top of that, Canadian National has shown it can operate efficiently and maintain pricing power over time, which is a key reason it continues to be such a reliable long-term investment and the perfect Canadian stock to buy for the foundation of your TFSA.
One of the best Canadian growth stocks to buy and hold in your TFSA
While Brookfield and CNR both have compelling long-term growth prospects and can compound your capital for years, one stock to buy that can massively power your portfolio’s growth for years to come is Dollarama (TSX: DOL).
Dollarama has been one of the most consistent growth stories in Canada for more than a decade now. Its discount retail business model, recognizable brand, and consistent execution from management have made it one of the best retail businesses you can own.
When consumers are under pressure, they look for lower-cost options, which can drive more traffic to its stores. At the same time, even in stronger economies, its convenience and pricing continue to attract customers.
That balance helps make the business more resilient while still allowing it to grow over time. And with continued expansion opportunities ahead, both domestically and internationally, it continues to be one of the best long-term growth stocks that Canadians can buy for their TFSAs.
