This Is My #1 TFSA Stock, and I’m Never Selling it 

Maximize your returns with TFSA stock investments. Discover top-performing stocks that can enhance your wealth tax-free.

Key Points
  • Bombardier stands out as a top TFSA stock for long-term holding due to its consistent growth strategy, driven by debt reduction and product launches that are boosting order books and revenue projections.
  • With ongoing share buybacks, effective tax loss utilization, and a strategic roadmap focusing on aftermarket expansion and defense sector, Bombardier continues to show strong growth potential, justifying its high valuation metrics.

The Tax-Free Savings Account (TFSA) is a tax-efficient tool to invest in wealth-generating stocks. If you manage to get even one multibagger stock in your TFSA, it can act as a catalyst in your tax-free wealth pool. The TFSA allows your investments to grow tax-free and even withdraw tax-free. However, the market tends to reward those who spend more time in it than those who try to time the market. By far, among the TSX stocks I have covered, three have been my favourite for TFSA wealth creation: Bombardier (TSX: BBD.B), Ballard Power Systems, and HIVE Digital Technologies.

man in bowtie poses with abacus

Source: Getty Images

My #1 TFSA stock to buy and hold forever

Among the three, Bombardier tops the list for its consistency in implementing plans and strengthening its balance sheet. The initial growth trigger was debt reduction, which drove the stock up in 2022 and 2023. The aftermarket service and entry in the defence sector drove the stock in 2024.

And now the catalyst is Global 8000, the flagship product that it brought into operations in 2025. This product is driving up Bombardier’s order book from US$17.5 billion in December 2025 to $21.8 billion in June 2026. Bombardier has the bandwidth to meet this order backlog efficiently. That explains why it gave a 2026 revenue guidance of $10 billion after reporting $9.55 billion in revenue in 2025. The second quarter saw no guidance revisions but gave investors assurance around 2027 revenues.

Does this TFSA stock have more growth left?

Bombardier’s turnaround began in 2020, and the stock soared more than 800% by October 2024. That’s when investors thought the stock had lived its rally. However, the stock surged another 200% from its October 2024 high of over $104 per share. This growth was driven by Global 8000. Today, Bombardier’s share price is at $341 and still rising. This rally has increased its valuations, making value investors cautious.

Trading at 25.75 times its price-to-earnings (P/E) ratio and 2.5 times its price-to-sales ratio, the stock is trading at its highest since its turnaround. Past valuations may not be a good comparison for a turnaround stock, but the growth is real. The 25.75 P/E ratio is supported by a 150% jump in earnings per share (EPS) for the first half of 2026.

Bombardier’s EPS growth will continue to remain high as management has $1.16 billion of unrecognized tax losses from its days of near bankruptcy, which it is claiming gradually. For instance, earnings before tax for the second quarter of 2026 were US$79 million. Bombardier realized $112 million in income tax recovery, increasing its net income from continuing operations to $191 million.

Not to mention, the business jet maker has started buying back shares to further boost EPS. It has yet to realize the earnings from the $21.8 billion order backlog and the shift to a higher-margin product mix.

So, does this stock have more growth left? Definitely. It will see a surge in inventories and working capital in the third quarter and maximum aircraft deliveries in the fourth quarter, when it will realize revenue. The stock could surge as more cash flows into the company with aircraft deliveries.

Is Bombardier stock a buy and hold for the next five years?

Bombardier’s strength lies in its clear roadmap to growth and robust implementation. Until 2024, it released an Investor Day presentation that outlined its five-year roadmap to 2030. The roadmap focused on five things:

  • Industry-leading portfolio: Achieved with Global 8000
  • Continued Aftermarket expansion: This segment’s revenue grew 14% year over year to US$674 million, increasing its revenue share to 31% in the second quarter of 2026, from 29% a year ago.
  • Bombardier Defense growth
  • Pre-owned market capture
  • Merger and acquisition (M&A)/Partnership opportunities

The last three opportunities are where Bombardier could unlock its next accelerated growth cycle. Until then, it will allocate excess cash to reduce debt and buy back shares. The company reduced its long-term debt to US$4.05 billion in June 2026 from US$5.15 billion in December 2025. The next debt maturity is directly in November 2030.

As long as there is growth, Bombardier will surge. It is expanding in the business jet lifecycle, from manufacturing jets to providing after-market service, modifying the planes for defence use, and refurbishing pre-owned planes.

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Investing

money goes up and down in balance
Investing

What’s Going on With goeasy’s Dividend?

As goeasy’s management is working to stabilize the business and improve its credit performance, its dividend could remain suspended.

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Telus and BCE Are Struggling: The Stock I’d Buy Instead Yields 5.8%

This Canadian stock yields about 5.8% and has a solid dividend growth history backed by a resilient business model and…

Read more »

man shops at grocery store
Investing

I’m Betting on Dollarama’s Latin American Growth After 29 New Stores in One Quarter

Dollarama stock continues to benefit from positive momentum in its retail operations in all countries that it operates.

Read more »

A worker gives a business presentation.
Stocks for Beginners

September Inflation Lands October 19: What It Means for Your Mortgage Rate

September inflation could change mortgage offers before the Bank of Canada acts. Here’s how to prepare without predicting the report.

Read more »

senior man smiles next to a light-filled window
Dividend Stocks

The Perfect Retirement TFSA Stock: A 4.8% Yield With Monthly Paycheques

Here’s why this monthly dividend stock could be an ideal addition to your TFSA if you’re looking for retirement income…

Read more »

Printing canadian dollar bills on a print machine
Tech Stocks

I’d Keep Shopify for its 18% Free Cash Flow Margin

With an expanding 18% free cash flow margin and massive share buybacks, Shopify proves why it remains a top TSX…

Read more »

woman relaxes with phone
Dividend Stocks

Telus Cut Its Dividend: At a 7.4% Yield, Here’s the Case for Buying Now

TELUS cut its dividend by 55%, yet shares yield 7.4%. See what the dividend reset means for income investors and…

Read more »

dreaming of financial success
Dividend Stocks

Early-Retirement Dream? How Your Accounts Can Help You Get There

Use Canada’s registered accounts to save and invest to help realize your early-retirement dream!

Read more »