A new year is officially here, and with it, another increase in the amount you can contribute to your Tax-Free Savings Account (TFSA).
For 2020, an extra $6,000 in contribution room was made available, bringing the total to $69,500 for those who were 18 or older in 2009.
With $6,000 in extra contribution space comes a great opportunity to add new stocks to your TFSA. Even if you were maxed out on all the contribution room available up to 2019, you can now add up to $6,000 to your account.
If you have space left over from previous years, the amount you have available is now $6000 larger. Either way, it’s a perfect opportunity to go shopping for stocks. So without further ado, here are three quality TFSA picks to consider for 2020.
Alimentation Couche-Tard Inc (TSX:ATD.B) is Canada’s largest convenience store company. The chain dominates gas station convenience stores in Canada, has a huge presence in the U.S., and is also pushing into Europe.
ATD.B has been an incredible growth story over the years. Most visibly, the company took over, rebranding Irving stores across Canada, making Alimentation’s Circle K the biggest convenience store chain in the country.
What makes ATD.B a good TFSA stock?
First off, the company has historically posted incredible growth. In its most recent quarter, it grew earnings at 24.4% year over year, and previous years showed similarly strong results.
Second, the stock pays a dividend, and while the yield is low, the dividend growth rate (about 20% a year) is extremely high.
Finally, the company is aggressively pursuing expansion into foreign markets and still has plenty of room to grow in Europe.
Enbridge Inc (TSX:ENB)(NYSE:ENB) is Canada’s largest pipeline company. In its most recent quarter it posted $3.1 billion in adjusted EBITDA while pursuing new infrastructure projects in the American mid-West.
ENB stock has many things going for it that make it a great TFSA pick.
It has an extremely high dividend yield at 6.24% and an average five-year dividend growth rate of 17%. This means that you’ll get $6,240 on every $100,000 invested in ENB now, and could get even higher payouts in the future.
The company has a lot of growth potential, with two major projects in the works that could increase its transportation capacity and revenue potential.
Finally, as a pipeline company, Enbridge is the rare energy play whose earnings don’t swing dramatically on oil price fluctuations, so you don’t need to worry about oil prices as much as you would with other Canadian energy stocks.
Canadian National Railway
Canadian National Railway (TSX:CNR)(NYSE:CNI) is Canada’s largest railway company, with an expansive three-coast shipping network. The company ships grain, petro-chemicals and other miscellaneous products across North America.
In recent years, CN has been hard at work expanding its service area and buying back shares. Last year, the company increased its transportation capacity by buying a New York bound line from CSX, adding to its intermodal business by buying out a division of Alberta trucking company H&R Transport.
In 2019, CNR’s growth was slower than in prior years due to Alberta oil curtailments, a poor fall grain harvest and issues with B.C. Timber supply.
Most of these conditions are temporary, however, and the stock remains a solid long-term buy.
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Fool contributor Andrew Button owns shares of Canadian National Railway. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway and Enbridge. The Motley Fool recommends ALIMENTATION COUCHE-TARD INC and Canadian National Railway. Alimentation Couche-Tard, Enbridge and Canadian National Railway are recommendations of Stock Advisor Canada.
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