TFSA: 3 Canadian Stocks to Hold for a Lifetime

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.

The TFSA (tax-free savings account) allows investors to earn tax-free returns upon a specified amount called the contribution limit. For this year, the CRA (Canadian Revenue Agency) has fixed the contribution limit at $7,000, with the cumulative value at $95,000. A decline in the value of stock invested in through a TFSA and subsequent selling would not only result in capital losses but could also lower the investor’s cumulative contribution limit. So, investors will have to be careful while investing through a TFSA. With that in mind, here are my three top picks you can buy and hold forever.

Waste Connections

Waste Connections (TSX:WCN) is North America’s third-largest waste management company. It operates primarily in exclusive or secondary markets in the United States and Canada, thus facing lesser competition and enjoying higher margins. The company has expanded its footprint through organic growth and strategic acquisitions. From 2016 to 2023, it spent $12 billion, or 50% of its total capital outlay, on acquisitions.

Given its solid financial position and healthy free cash flows, WCN continues to look for acquisition opportunities that fit its strategy and create long-term value for its shareholders. Besides acquisitions, the company is developing multiple Renewable Natural Gas (RNG) and resource recovery facilities, with three projected to become operational this year. Amid these growth initiatives, WCN’s management expects an incremental annual EBITDA of $200 million from 2026. Besides, management has plans to return a higher percentage of capital outlay to its shareholders in the coming years. Considering all these factors, I believe WCN would be an excellent addition to your TFSA.

Enbridge

Enbridge (TSX:ENB) transports oil and natural gas across North America and has a strong presence in the natural gas utility and renewable energy sectors. Given its contracted and regulated business, the midstream energy company’s financials are less susceptible to market volatility. So, it delivers stable and predictable cash flows, irrespective of the broader market environment, allowing it to raise dividends consistently. It has raised its dividends for the previous 29 years at a CAGR (compound annual growth rate) of 10%, while its forward yield stands at 7.6%.

Meanwhile, Enbridge is expanding its natural gas asset base by acquiring three facilities in the United States. These acquisitions could make it North America’s largest natural gas utility company. Besides, the company plans to invest around $6 to 7 billion annually through 2026, expanding its pipeline, utility, and renewable assets. These investments could boost Enbridge’s cash flows, thus allowing it to maintain its dividend growth.

goeasy

goeasy (TSX:GSY) is another stock that offers excellent long-term growth potential. Over the last five years, the company has expanded its loan portfolio at an annualized rate of 35%, while its net charge-off rate has declined from 13.3% to 8.9%. Amid these solid operating performances, its revenue and free cash flows have grown at a CAGR of 20% and 33%, respectively. Despite these solid performances, the company’s market share in the $218 billion Canadian subprime market is around 2%. So, it has considerable scope for expansion.

Meanwhile, the subprime lender’s full suite of consumer credit products, solid distribution channels, geographical expansion, and strengthening of IT infrastructure could continue to drive its loan originations. Besides, improving economic activities amid easing inflation and falling interest rates could also raise credit demand, thus benefiting goeasy. Further, it has raised its dividends at an annualized rate of 30% for the last 10 years and trades at an attractive NTM (next 12 months) price-to-earnings multiple of 10.6.

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Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.