2 TFSA Millionaire-Makers on Sale Today

Even a time-tested millionaire-maker stock can fall short of the mark if you buy it at the wrong time. Buying them discounted and ready for a revival should be the goal.

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TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.

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The term millionaire-maker stock is highly subjective and tied to several “ifs.” If you buy enough of a healthy stock and hold onto it for long enough, you can theoretically turn your stake into a million dollars. In order to make more realistic choices, you have to introduce a few constraints.

The Tax-Free Savings Account (TFSA) comes with constraints – that is, the contribution room. The maximum contribution room in 2024 is $95,000, assuming you didn’t make any withdrawals. If we limit ourselves to stocks that can make us a millionaire in a realistic timeframe, the choices become significantly limited.

However, options are still available, and two are currently discounted.

A gold stock

Franco-Nevada (TSX:FNV) is one of the largest gold companies in Canada (by market cap) and most promising stocks in the sector. One overarching reason for that is its business model. Unlike gold mining stocks that offer investors direct exposure to the metal (with performance often tied to gold prices), Franco-Nevada offers a sheltered/shielded experience.

As a royalty and streaming company, Franco-Nevada has a financial stake in gold mining operations across the world. They either get a share of the revenues or have the option to buy the gold produced by these companies at an attractive price.

Not only is this business model more sheltered against gold price fluctuations, making its long-term performance more impressive than typical gold mining stocks, but Franco-Nevada is a giant in this particular niche.

It has an impressive portfolio of holdings, which is quite future-facing since a significant segment of it is in projects that are currently in the exploration stage.

Created with Highcharts 11.4.3Franco-Nevada PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

It’s also a dividend aristocrat, but its dividends are not nearly as impressive as its long-term growth potential, at least up until a few years ago. The stock returned about 240% to its investors in the last decade. At this rate, it can turn a fully stocked TFSA into a million-dollar nest egg in around three to four decades. It’s trading at a discount of about 13% from its five-year peak.

An airline

While the Franco-Nevada pace is more realistic for long-term growth, you may have a decent chance of attaining similar results in a shorter timeframe with Cargojet (TSX:CJT). This Mississauga-based airline is the largest of its kind (time-sensitive air cargo) in Canada. With a 41-aircraft fleet covering over 70 destinations, it’s a top choice for various businesses and individual customers.

Created with Highcharts 11.4.3Cargojet PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

As a leader in its niche and a promising business, Cargojet stock has experienced exceptional growth since its inception. Then, it all came crashing down during a brutal correction from which the stock had just started to reel.

But even taking that correction into account, the stock’s 10-year returns are over 570%. Now that it’s on the recovery journey and still heavily discounted (44%), the returns in the next decade might be far more promising.

The stock may even be able to make you a millionaire in less than two decades. It pays dividends too and while they do beef up the overall return potential, the 1% yield doesn’t help them stand out on their own.

Foolish takeaway

The two stocks can realistically help you turn your TFSA savings into a million-dollar nest egg, whether you buy them individually or collectively. You can accelerate this growth by adding similar stocks to your TFSA portfolio in the coming years.

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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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cargojet. The Motley Fool has a disclosure policy.

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