New TFSA Investors: 3 Canadian Stocks to Hold Until Retirement

Suncor Energy Inc. (TSX:SU)(NYSE:SU) and another two top Canadian stocks are a good start to build a TFSA retirement fund.

The Motley Fool

Young Canadians are using the Tax Free Savings Account (TFSA) to set aside funds for their retirement years.

Let’s take a look at three stocks that might be interesting buy-and-hold picks today.

Suncor Energy Inc. (TSX:SU)(NYSE:SU)

The energy sector can be volatile, and betting on the pure-play producers has turned out to be a nightmare for many investors over the past four years. That said, there are opportunities for buy-and-hold picks that won’t keep you up at night, and Suncor is one of those stocks.

The company is a market leader with a strong balance sheet, substantial resources, and steady production growth supported through strategic acquisitions and organic developments.

Aside from the oil sands and offshore production assets, Suncor also operates refineries and a large retail business. Combined, the diversified segments provide a balanced revenue stream that helps Suncor ride out downturns in the oil market.

Suncor raised the dividend by 12.5% this year, and future payout growth should continue.

Nutrien Ltd. (TSX:NTR)(NYSE:NTR)

Nutrien is a global crop nutrients powerhouse with a wholesale business that produces potash, nitrogen, and phosphate, and a retail division that sells crop protection and seed products.

There are an estimated 7.6 billion people on the planet today. That number is expected to hit 10 billion by 2050. At the same time, land available to grow food continues to diminish as cities expand into the countryside. One way to get better crop yield is to use more fertilizer, so demand should be robust in the coming decades.

Nutrien pays its dividend in U.S. dollars. The current distribution provides a yield of 2.9%.

Shaw Communications Inc. (TSX:SJR.B)(NYSE:SJR)

Shaw went through a major transformation in recent years when it entered the mobile market with its $1.6 billion purchase of Wind Mobile in 2016, which it later renamed Freedom Mobile. The wireless business gives Shaw a mobile option to package together with its TV and internet services to better compete with its peers.

Shaw sold its media assets to Corus Entertainment for $2.65 billion to help fund the Wind purchase and is now looking to unload its 38% stake in Corus to finance the continued expansion of the Freedom Mobile business. Once that is done, and the wireless investments peak, investors could see a return to steady dividend growth.

Shaw’s current dividend should be safe, is paid monthly, and provides a yield of 4.3%.

The bottom line

An equal investment in all three companies would provide diversified exposure for a balanced TFSA retirement fund. If you have a buy-and-hold investing style, Suncor, Nutrien, and Shaw deserve to be on your radar.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Walker owns shares of Nutrien. Nutrien is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

concept of real estate evaluation
Dividend Stocks

Invest $23,253 in This Stock for $110 in Monthly Passive Income

Dividend investors don’t need substantial capital to earn monthly passive income streams from an established dividend grower.

Read more »

Dividend Stocks

3 Mid-Cap Canadian Stocks That Offer Reliable Dividends

While blue-chip, large-cap stocks are the preferred choice for most conservative dividend investors, there are some solid picks in the…

Read more »

The letters AI glowing on a circuit board processor.
Dividend Stocks

Is OpenText Stock a Buy for Its 3.6% Dividend Yield?

OpenText stock has dropped 20% in the last year, yet now the company looks incredibly valuable, especially with a 3.6%…

Read more »

calculate and analyze stock
Dividend Stocks

How to Use Your TFSA to Earn $6,905.79 Per Year in Tax-Free Income

Put together a TFSA and this TSX stock, and you could create massive passive income from returns and dividends.

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Is RioCan REIT stock a buy for its 5.9% yield?

RioCan Real Estate Investment Trust (TSX:REI.UN) has had a rough go of it, but may be poised for a recovery.

Read more »

Dividend Stocks

3 CRA Red Flags for High TFSA Balances: Mistakes to Avoid

The CRA will not interfere as long as long as TFSA users avoid three costly mistakes.

Read more »

Canadian dollars are printed
Dividend Stocks

Transform Your TFSA Into a Cash-Generating Machine With Just $28,000

Canadians can turn their TFSAs into a cash-generating machine with money equivalent to four years’ contribution limits.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

Here’s the Average RRSP Balance at 45 in Canada

The RRSP is a strong tool for investors, but only if you invest in top stocks like this ETF for…

Read more »