I'm Using These 2 Canadian Stocks as My TFSA Cornerstones

I’m Using These 2 Canadian Stocks as My TFSA Cornerstones

These two Canadian stocks have outperformed the market long-term. Buy these as foundations for your TFSA for decades to come.

Robin Brown

Robin Brown has been a Motley Fool contributor since January 2020. He has lived in Canada, Norway, and Australia where he studied theology and business management. Robin works as a commercial real estate manager, as well as an investment research advisor for a private investment manager. Today, he provides equity research and analysis for a private family office. He enjoys traveling, hiking, fishing, and spending time with his wife and children.

Published August 20, 8:00 pm EDT

When I am investing in my Tax-Free Savings Account (TFSA), I want to think as long-term as possible. I want the stocks that I own to increase and multiply by many times. If I want to enjoy the benefits of “tax-free”, I want to be sure to maximize the amount of income I can earn in the account.

As a result, I am not looking for short-term gains. I want long-term winners that I can buy and tuck away for years. Here are two TFSA cornerstone stocks that I would be happy holding for decades to come.

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement. — Source: Getty Images

Constellation: A top Canadian performer for a long-term TFSA

Constellation Software (TSX:CSU) is one of my core TFSA stocks. The company has delivered a 16,912% gain over the past 20 years. It has made many millionaire shareholders since its IPO.

With a $65 billion market cap, it is certainly no small company. Yet, the company continues to generate mid-to-high teens revenue growth and even better cash flow growth.

It has built a re-investment machine. It buys small niche software companies, optimizes them for cash generation, and re-invests them into more acquisitions. It’s a perfect formula for compounding.

The company has an incredible team of managers and a strong balance sheet. It has a track record of great execution and great returns.

Its stock is down 28% in the past year. The market was worried about AI disruption. Yet, the company is likely a major winner from AI as it integrates it into processes and new services.

Trading for only 17 times free cash flow, this stock still looks like an attractive growth-at-a-reasonable-price (GARP) investment today.

Descartes: A high quality stock for a TFSA

Descartes Systems (TSX:DSG) is another foundational stock. This stock is up 2,135% in the past 20 years.

Like Constellation, Descartes is a software company. However, a core differentiator is its Global Logistics Network. It connects logistics and supply chain participants across the world. Once adopted, this network is very hard to leave.

The network provides Descartes substantial amounts of data. It is starting to use that data to create AI solutions that automate customer workflows. It is only in the early innings of this. However, the market has yet to recognize it.

Descartes has all the hallmarks of a quality stock. It has over $360 million in net cash. It has record of deploying cash into accretive acquisitions. Descartes has high recurring revenues and very strong margins.

Descartes aims to grow 12–15% per year. The past couple of years, it has exceeded that rate given rising market share and strong overall demand.

Like Constellation, this TFSA stock has been drawn down on fears around AI disruption. DSG is down 21% in the past year. It is trading just off its lowest valuation in the past 10 years. Descartes has never been a cheap stock. However, typically any major dip in the past has been a great buying opportunity.

The Foolish bottom line

While tech stocks are in the dumps, you can pick up some legends on the cheap. Constellation and Descartes are the image of high-quality companies and high-quality stocks. They have had a tough year in 2026, but you can use that to your long-term advantage in building your TFSA.