2 of the Best Canadian Stocks for a Buy-and-Hold in a TFSA

Aritzia (TSX:ATZ) and another great name to hold in a TFSA long term.

Key Points
  • Canadian Tire (CTC.A) looks like a reasonable long-term dividend value play, with a ~3.7% yield and a mid-teens valuation despite ongoing pressure on Canadian discretionary retail.
  • Aritzia (ATZ) is the higher-growth pick: even after a pullback, the view is that its brand strength and U.S. expansion can keep driving gains despite a tough apparel backdrop.

For Canadian investors who’d rather not trade but hang onto shares of a great business for many decades at a time, there are many options to consider. In this piece, we’ll look at two Canadian names I think are still going for a decent multiple and might be worth picking up this July.

Whether you’re looking to invest for a TFSA or somewhere else for at least the next three years, the following pair (one higher-yielding dividend stock and a spicier growth play) is worth a closer look this summer.

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Source: Getty Images

Canadian Tire

Shares of Canadian Tire (TSX: CTC.A) are starting to pick up again despite the headwinds that still face Canadian retail. While discretionary retail isn’t out of the woods yet, as inflation and economic uncertainties (recession?) cloud the future, I do think that the technical set-up and price of admission could make the name a rather timely play for the second half of 2026.

Today, shares yield 3.7% while going for 16.2 times trailing price-to-earnings (P/E). Not a bad value proposition for one of Canada’s oldest publicly traded retailers. While time will tell if CTC.A shares make a move for new highs, I do think that the firm is fundamentally sound across numerous fronts.

Whether it’s the strong brand portfolio, the Triangle loyalty program, strong physical presence, e-commerce momentum, or operations automation potential, the company certainly has all the makings of a long-term winner.

Of course, the biggest gains could arise once Canada’s economy really starts growing, perhaps due to AI-driven productivity gains, a trade deal with the U.S., and a drop-off in inflation. Indeed, it seems like neither of these things will happen soon enough, but if you’ve got a long time horizon, CTC.A looks more like a bargain than you’d think. The firm is doing everything in its power to swim ahead; it just needs the tides to flow in its favour for a change.

Aritzia

Aritzia (TSX: ATZ) might seem like a ridiculously expensive stock that’s overdue for a big crash at some point. With shares correcting more than 16% off its peak, though, I do think that the recent wave of concern is more of a chance to top up than bail out. The company has been an incredible performer, nearly doubling in a year, thanks in part to its exceptional stewardship and smart expansion into the U.S. market.

At a time when apparel is on the ropes, I find it absolutely remarkable that Aritzia has been able to post strong growth numbers. I think it’s a share-taker that’s still in its early days of growth, given its mere $16.6 billion market cap and formula, which I think will continue to work, even as discretionary retail becomes a tough place to compete.

Where some see Aritzia as a relatively expensive clothing retailer, others see “everyday luxury” at a price that won’t break the bank. Indeed, the Aritzia brand has demonstrated considerable pricing power on both sides of the border. As the firm scales, my bet is that it will keep growing at a stunning pace. It’s a share-taker and one that might be able to thrive in an economic climate that gets hit with stagflationary-esque pressures.

Love it or hate it, it’s working in this environment in a big-time way, and I think it’ll continue to work, even as the rest of apparel retail feels a sting alongside broader industry headwinds.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Aritzia. The Motley Fool has a disclosure policy.

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