TFSA: 4 Canadian Stocks to Buy Now and Hold Forever

These Canadian stocks are top notch for investors wanting to gain access to a diversified portfolio for the long run.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published December 22, 2024 9:15 am EST

Creating a diversified portfolio in your Tax-Free Savings Account (TFSA) is one of the smartest moves for long-term financial growth. By spreading your investments across various sectors and industries, you reduce the impact of any single investment’s downturn — all while positioning yourself to capture opportunities in multiple areas. It’s like creating a buffet: no one dish dominates, and every choice complements the rest. So, let’s look at some options.

Blocks conceptualizing Canada's Tax Free Savings Account — Source: Getty Images

Waste Connections

Waste Connections (TSX:WCN) is a powerhouse in the waste management industry, a sector that thrives regardless of economic conditions. Waste disposal is a necessity, making WCN a dependable choice for stability. In its most recent quarter, WCN reported a 13.3% year-over-year increase in revenue to $2.34 billion, surpassing analysts’ expectations.

The Canadian stock’s diluted earnings per share (EPS) of $1.35 also beat projections, showcasing strong operational efficiency. With a forward price-to-earnings (P/E) ratio of 24.10, Waste Connections offers a combination of reliability and steady growth. It even sweetens the deal with dividends, offering an annual payout of $1.76 per share. Over the past five years, WCN has consistently outperformed, making it a staple for any defensive portfolio.

WSP Global

Next, we have WSP Global (TSX:WSP), a leader in engineering and consulting services. Infrastructure spending worldwide is booming, and WSP is perfectly positioned to benefit. The Canadian stock’s latest earnings report revealed a 10.7% increase in quarterly revenue, climbing to $15.23 billion over the past twelve months.

Even more impressive is WSP’s growing backlog, now valued at $13.8 billion, which represents over a year of guaranteed revenue. Its forward P/E ratio of 27.10 reflects the market’s confidence in its ability to continue delivering value. WSP’s solid dividend payout ratio of 29.13% ensures it balances reinvestment for growth with rewarding shareholders, making it a great pick for TFSA investors focused on both income and appreciation.

Lundin Mining

Lundin Mining (TSX:LUN) is a gem for those looking to add some mining exposure to their portfolios. This Canadian stock specializes in base metals like copper, zinc, and nickel. Essential for global electrification and renewable energy projects.

Lundin has had a strong year, with quarterly revenue growing 8.1% year over year to $4.15 billion as of September 2024. The Canadian stock currently offers a forward P/E of 13.39, suggesting it’s undervalued relative to its future earnings potential. Lundin’s dividend yield of 2.77% adds an income layer, while its lean debt-to-equity ratio of 33.97% keeps it financially sound. For those bullish on the transition to green energy, Lundin Mining is a strategic pick.

Brookfield Renewable

On the renewable energy front, Brookfield Renewable Partners (TSX:BEP.UN) shines brightly. With one of the largest renewable energy portfolios globally, BEP.UN provides exposure to hydroelectric, wind, and solar power assets. The Canadian stock’s revenue surged by 24.7% year over year to $5.77 billion in its most recent quarter, reflecting its ability to capitalize on the growing demand for clean energy.

BEP.UN also offers a generous forward annual dividend yield of 5.82%, making it a favourite among income investors. Its recent investments in storage solutions and diversified energy production solidify its position as a key player in the transition to sustainable energy. For TFSA investors, BEP.UN offers a mix of income and growth — all while aligning with the ESG (environmental, social, and governance) trend.

Bottom line

Together, these four companies provide a perfect storm of diversification. A diversified portfolio not only reduces risk. It also maximizes your opportunities to capture upside across sectors. As an investor, your job is to review and rebalance periodically, ensuring your holdings still align with your goals. Whether you’re a beginner or a seasoned investor, this quartet is a solid start for any TFSA strategy. By investing in reliable, growth-oriented companies like these, you set yourself up for long-term success. All while enjoying the tax-free benefits of your TFSA. As always, consult with a financial advisor to ensure these choices align with your risk tolerance and investment horizon.