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3 Stocks to Add to Your TFSA ASAP

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Source: Getty Images

Written by Nicholas Dobroruka at The Motley Fool Canada

When it comes to long-term savings, the TFSA (Tax-Free Savings Account) isn’t always the first account that comes to mind. The Registered Retirement Savings Plan (RRSP) often dominates any sort of long-term saving conversation. And as the name suggests, that shouldn’t be all that surprising to hear.

While the RRSP may be the main account for retirement savings for many Canadians, the TFSA certainly cannot be overlooked. A major benefit of the TFSA is that not only are withdrawals not taxed but neither are capital gains. Meaning that Canadians are able to benefit from decades of compound interest and then withdraw their entire savings completely tax free.

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The catch is that TFSAs have much lower contribution limits than RRSPs. In 2023, Canadians are able to contribute a maximum of $6,500 to their TFSA. However, unused contributions from previous years can be carried over from year to year. As a result, the total TFSA contribution limit dating back to its introduction in 2009 is $88,000.

If you’ve got some contribution room available in your TFSA still, here are three top TSX stocks that should be on your radar.

Shopify

Long-term investors won’t want to miss out on this buying opportunity. And with shares on the rise, Canadians may not have much longer to start a position in Shopify (TSX:SHOP) at a discount like this.

Alongside many other tech stocks in 2022, shares of Shopify plummeted. Today, the tech stock is trading more than 70% below all-time highs that were set in late 2021. Still, shares are up a market-crushing 225% over the past five years.

Shares of Shopify are already up more than 20% this year, so I’d act fast if you’re looking to take advantage of this discount.

Nuvei

It’s been a wild ride for Nuvei (TSX:NVEI) ever since joining the TSX in 2020. In the midst of the pandemic, the tech stock managed to return market-crushing gains early on. But like many other tech stocks, much of those gains have been lost over the past year.

The $8 billion company specializes in providing payment technology solutions to merchants across the globe. It’s a crowded market, but Nuvei has done a solid job expanding its international presence and growing its product offering in recent years.

For a stock with plenty of market-growth potential in front of it, Nuvei is very reasonably priced. But with shares already up 60% year to date, that may not be the case for much longer.

Northland Power

Renewable energy was another area of the stock market that underperformed in 2022. In fact, many Canadian green energy stocks have been trending downwards dating back to early 2020.

Northland Power (TSX:NPI) can not only drive market-beating returns, but the energy company also pays an impressive dividend. At today’s stock price, the dividend is yielding more than 3.5%. That’s not bad for a stock that’s returned close to 50% over the past five years.

If you’re bullish on the long-term rise of renewable energy, now is the time to load up on top companies in the sector.

The post 3 Stocks to Add to Your TFSA ASAP appeared first on The Motley Fool Canada.

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Fool contributor Nicholas Dobroruka has positions in Shopify. The Motley Fool has positions in and recommends Nuvei and Shopify. The Motley Fool has a disclosure policy.

2023