Don't Miss AI's Third Wave
A tax-free savings account (TFSA) is an excellent option for creating wealth over the long term, as it allows Canadians to earn tax-free returns. If you have not maximized your TFSA contribution limit of $7,000 this year, here are four stocks you can buy and hold forever.
Dollarama
First on my list would Dollarama (TSX:DOL), which has grown its revenue and net earnings at an annualized rate of 11.1% and 17.4%, respectively, since fiscal 2011. Aggressive expansion of its store network from 652 in fiscal 2011 to 1,601 and healthy same-store sales amid compelling value offerings and expanded product offerings have driven its financials since fiscal 2011. Amid these solid performances, the discount retailer has returned around 607% in the last 10 years at an annualized rate of 21.6%.
Moreover, Dollarama continues to expand its store network and expects to raise its store count to 2,200 by the end of fiscal 2034. Given its capital-efficient, growth-oriented business model, lean operations, and lower payback period, these expansions could boost its top and bottom lines. Further, its expansion in Latin America through its subsidiary, Dollarcity, would also support its financial growth in the coming years. Considering all these factors, I believe Dollarama would be a worthy addition to your TFSA.
Waste Connections
Second on my list is Waste Connections (TSX:WCN), a non-hazardous solid waste management company operating in the United States and Canada. The company has expanded its operations across both countries through organic growth and strategic acquisitions, thus supporting its topline growth. With its operations primarily focused on exclusive and secondary markets, it faces lesser competition and enjoys higher margins. These solid financials have supported its stock price growth, with the company returning 475% over the last 10 years at an annualized rate of 19.1%.
Moreover, WCN is building resource recovery and renewable natural gas facilities, which could become operational next year. Further, its continued acquisitions and favourable rate revisions could support its topline growth. The company’s management projects its 2025 revenue to grow by a mid-to-high single digits, while its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) could increase by a high single digit. So, I expect the uptrend in WCN’s financials to continue, supporting its stock price growth.
Enbridge
I have picked a high-yielding dividend stock, Enbridge (TSX:ENB), as my third pick. The company’s tolling framework and long-term take-or-pay contracts shield its midstream energy business from market fluctuations. Also, its low-risk utility business and power purchase agreements to sell the energy produced from its renewable assets stabilize its financials. These stable and reliable cash flows have allowed the company to pay dividends for 70 years while raising the same for 30 consecutive years. It also currently offers a healthy dividend yield of 6%.
Further, Enbridge continues expanding its asset base and expects to put around $23 billion of assets into service by 2027. Further, the recent acquisition of three natural gas utility assets in the United States could also improve its cash flows while lowering business risks. Amid these growth initiatives, the company’s management expects its adjusted EBITDA to grow at a 7–9% CAGR (compound annual growth rate) until next year and 5% after that. So, Enbridge is well-positioned to continue its dividend growth, making it an enticing addition to your TFSA.
goeasy
My final pick would be goeasy (TSX:GSY). The subprime lender has grown its revenue at an annualized rate of 19.4% for the last 10 years, while its adjusted EPS (earnings per share) has grown at 27.6%. Amid solid financial growth, GSY stock has returned around 820% in the previous 10 years at an annualized rate of 24.9%.
Meanwhile, the company’s expanded product offering, development of new distribution channels, enhanced customer relationships, and adoption of risk-based pricing to lower the cost of borrowing for its consumers could continue to expand its loan portfolio, thus driving its revenue. Further, the company has tightened underwriting requirements and adopted next-generation credit models, which could lower delinquencies and drive its profitability. Further, falling interest rates could drive economic activities, thus driving credit demand, which could benefit goeasy. Considering all these factors, I expect goeasy to deliver superior returns in the long run.
