TFSA: Invest in These 3 Stocks for a Real Shot at $1 Million

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The flexibility offered by the Tax-Free Savings Account, or TFSA, can be used to create game-changing wealth over time. Investors can hold a combination of growth and dividend stocks in a TFSA to generate outsized gains in the upcoming decade.

As any returns earned in this registered account in the form of dividends or capital gains are exempt from Canada Revenue Agency taxes, the TFSA is ideal for both income and growth investors.

Additionally, you can also hold stocks trading south of the border in this account and further diversify your portfolio. Here are three stocks TFSA investors can hold for a real shot at $1 million.

Snowflake stock

An enterprise-facing, cloud-based data warehousing company, Snowflake (NYSE:SNOW) is among the fastest-growing stocks in the world. Valued at US$63.6 billion by market cap, Snowflake allows companies to integrate their data sets and execute a widening set of workloads, ranging from cybersecurity, data science, artificial intelligence, and machine learning.

Snowflake stock is up over 30% since the company reported its third-quarter (Q3) results and grew sales by 32% year over year to US$734.2 million. It ended Q3 with a net revenue retention rate of 135%, indicating existing customers increased spending by 35% in the last 12 months. Moreover, the number of customers with an annual spending of at least US$1 million on the Snowflake platform surged by 52% to 436.

Its rapid growth in sales has allowed the software-as-a-service company to report cash flows of more than US$102 million, indicating a healthy margin of almost 15%.

Snowflake’s improving profit margins, rapidly expanding addressable market, and enviable revenue growth make it a top investment for long-term investors right now.

Brookfield Asset Management stock

One of the largest companies in Canada, Brookfield Asset Management (TSX:BAM), offers you a tasty dividend yield of 3.6%. BAM is an alternative asset manager with a growing portfolio of cash-generating assets across verticals such as infrastructure, clean energy, private credit, real estate, and more.

BAM is well positioned to grow its assets under management in the upcoming decade, given the overall alternative investment market is forecast to expand to US$23.3 trillion by 2026, up from US$13.3 trillion in 2021. Moreover, institutional allocation toward alternate assets might rise from just 5% in 2000 to 60% in 2030.

Priced at 23 times forward earnings, BAM stock is not very expensive, given its adjusted earnings are forecast to grow by 15% in 2024.

Alimentation Couche-Tard stock

The final growth stock on my list is Alimentation Couche-Tard (TSX:ATD), another TSX giant valued at $74 billion by market cap. Part of a recession-resistant sector, ATD operates a network of convenience stores in North America and Europe.

It sells groceries, beverages, and fresh food in addition to other retail products such as transportation fuel and chemicals, serving millions of customers each day.

ATD stock has delivered market-beating returns to shareholders in the past two decades, rising 3,710% since December 2003 after adjusting for dividends. Despite its outsized gains, ATD stock trades at 16.7 times forward earnings, which is quite cheap.

Should You Invest $1,000 In Snowflake?

Before you consider Snowflake, you’ll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in November 2023… and Snowflake wasn’t on the list.

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See the 5 Stocks

* Returns as of 11/14/23

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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Brookfield Asset Management and Snowflake. The Motley Fool has a disclosure policy.