The 2 Stocks I’d Combine for a Strong TFSA Strategy in 2026

These picks both trade undervalued and have a tonne of long-term potential, making them two of the best stocks to buy in your TFSA this year.

Key Points
  • Renewable energy is a strong TFSA theme for long‑term investors as geopolitical risks and electrification boost demand for stable, contract‑backed power.
  • Brookfield Renewable (BIP.UN) offers stability and diversified, long‑term contracted cash flows with a ~4.2% yield and annual distribution growth.
  • Northland Power (NPI) offers greater upside from project growth—~2.7 GW operating plus ~1.05 GW under development—after a dividend cut that improved flexibility (yield ~3.1%).

One of the biggest mistakes investors can make is focusing too much on what the market might do over the next few months. Especially in a TFSA, where the goal is often to build wealth over years or even decades, trying to predict short-term market moves is usually less important than identifying long-term trends and investing accordingly.

And while 2026 has brought its fair share of volatility, fears of higher inflation, and geopolitical uncertainty, those conditions have also created opportunities for long-term investors to capitalize on.

Renewable energy is a good example. Over the last few years, the sector has faced pressure from higher borrowing costs and weaker investor sentiment.

However, many of the same factors creating uncertainty today, such as the conflict in the Middle East and the global impact on energy prices, are precisely what’s reinforcing the need for energy security, electrification, and reliable power generation over the long term.

That’s why renewable energy stocks are some of the best investments you can make in your TFSA in 2026 for the long haul. And two of the top picks in the sector are Brookfield Renewable Partners (TSX: BEP.UN) and Northland Power (TSX: NPI).

Aerial view of a wind farm

Source: Getty Images

Brookfield Renewable: An ideal stock to buy for your TFSA in 2026

If you’re looking for stability within the renewable energy sector, Brookfield Renewable is hard to ignore.

The company owns a globally diversified portfolio of renewable assets across hydroelectric, wind, solar, and energy storage operations. That diversification helps reduce risk while also giving investors exposure to multiple areas of the renewable energy market.

Another reason Brookfield Renewable stands out is the quality of its cash flow. Much of its revenue is backed by long-term contracts, which helps provide stability even when economic environments become more volatile.

Furthermore, and something that flies under the radar for many investors, is that the company also benefits from being part of the broader Brookfield ecosystem, giving it access to capital, operational expertise, and investment opportunities that many competitors simply don’t have.

That combination of assets already generating cash flow and long-term growth potential from consistently investing in new projects is what makes it such an attractive long-term investment.

Because in addition to its growth potential, it currently yields 4.2% and continues to increase its distribution each year.

Therefore, while Brookfield still trades at a reasonable valuation, and considering the significant tailwinds the renewable sector has, it’s easily one of the best stocks to buy for your TFSA in 2026.

Northland Power: Even more upside potential for patient investors

While Brookfield Renewable offers more stability in the renewable space, Northland Power has significantly more capital gains potential, especially over the next few years as some of its largest projects come online.

Like many renewable stocks, Northland has faced increased challenges over the last few years, particularly as higher interest rates and project delays weighed on investor sentiment.

It also cut its dividend last December by 40% to improve its financial flexibility in the near term. And even after cutting the dividend, the stock still yields a compelling 3.1% today.

Furthermore, despite those short-term headwinds, Northland continues to build out a large international portfolio of renewable projects, with a particular focus on offshore wind.

These projects can take years to develop, but they also have the potential to significantly increase earnings and cash flow once they become operational.

In fact, Northland currently has roughly 2.7 gigawatts of net generating capacity, and projects expected to come online over the next few years will add another 1.05 gigawatts. That’s a considerable increase in its operations.

That’s why it’s one of the best stocks to consider for your TFSA in 2026. Because building a strong TFSA isn’t about trying to predict which stocks will perform best over the next few months. It’s about using today’s environment to identify long-term opportunities and building positions in high-quality businesses while they’re still out of favour.

And right now, renewable energy stocks continue to offer some of the best long-term potential, especially as many of the headwinds they’ve faced begin to ease.

Fool contributor Daniel Da Costa has positions in Northland Power. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

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