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TFSA Investors: 3 Top Stocks to Buy Now and Own for Decades

Andrew Walker
Updated

Canadian savers are taking advantage of the TFSA to set money aside for their retirement years.

Ideally, you want to buy top companies and simply sit on the holdings for a couple of decades. Inside the TFSA, the dividends and capital gains remain tax-free, so when the time comes to finally spend the money, the full value in the TFSA is yours to keep.

Let’s take a look at three companies that might be interesting picks for your TFSA retirement portfolio.

Waste Connections (TSX:WCN)(NYSE:WCN)

Waste Connections provides garbage and recycling services in Canada and the United States that include collection, transfer, and disposal. The company also has a division that takes care of non-hazardous waste at oil and gas production sites, primarily located in the Permian, Bakken, and Eagle Ford plays.

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Waste Connections has historically grown through acquisitions, and that trend is expected to continue as the waste industry consolidates.

The company raised its outlook for 2018 when it reported the Q2 results, citing a strong pricing environment. Management plans to increase the dividend by at least 10% per year, funded through free cash flow growth.

Investors have done well with Waste Connections. The stock increased from $38 per share five years ago to the current price of $100.

Nutrien (TSX:NTR)(NYSE:NTR)

Nutrien is a global powerhouse in the crop nutrients industry, with strong wholesale operations producing potash, nitrogen, and phosphate to countries around the globe. The company also has a large retail division that sells seed and crop protection products to the world’s farmers.

The company was created by the merger of Potash Corp. and Agrium. The two companies completed major multi-year capital programs before getting together, so the company is positioned well to meet rising demand in the coming decades.

Management upgraded guidance twice so far in 2018 due to strong demand and rising prices. Investors should see an increase to the dividend next year. The current payout provides a yield of 2.8%.

Toronto-Dominion Bank (TSX:TD)(NYSE:TD)

TD is best known for its Canadian operations, but the company actually operates more branches in the United States than it does in Canada. The American business is attractive for long-term investors, especially in the current environment of rising interest rates, a strong economy, and reduced taxes.

TD is targeting earnings growth of 7-10% over the medium term, but the company often exceeds the guidance. The dividend has increased by more than 10% per year over the past two decades.

The bottom line

Waste Connections, Nutrien, and Toronto-Dominion Bank are market leaders in their industries and should be solid buy-and-hold picks for a TFSA retirement fund. An equal position in all three stocks would give investors good exposure across a variety of sectors.

More reading

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