The Tax-Free Savings Account (TFSA) is one of the most powerful tools available to Canadian investors. Its tax-free structure allows you to avoid capital gains taxes, making it ideal for long-term growth investing. To make the most of your contribution room, it’s wise to focus on high-quality, durable growth stocks—not speculative bets.
Here are two Canadian stocks that stand out as buy-and-hold candidates for life within a TFSA.
Also Read: Stock investment Canada for beginners
- Descartes Systems (TSX:DSG)
Descartes Systems has long been a leader in logistics, customs, and trade compliance software, helping companies navigate complex global supply chains.
Earlier this year, the stock traded at lofty valuations with a forward P/E of 51, but tariff-driven trade disruptions have brought it back down to earth. After a significant pullback, the stock now trades at a much more reasonable forward P/E of 27, near its 52-week low—creating an attractive entry point for long-term investors.
While tariffs have weighed on trade volumes, the market has largely priced in the uncertainty. As global trade realigns under new policies and supply chain shifts, Descartes is positioned to capture increased demand for its transport management and regulatory solutions.
This isn’t the first time Descartes has faced macro headwinds. The company navigated the 2016 oil crisis, the 2018 U.S.–China trade war, and the 2020 pandemic, each time emerging stronger with higher revenue growth and improved margins. This time, management has preserved EBITDA by cutting costs and pursuing strategic acquisitions to expand capabilities.
As trade volumes recover, Descartes’ recurring revenue model and operational resilience should drive a rebound in both earnings and its stock price, making it a prime long-term TFSA holding.
Also Read: Long term investing in Canada
- Topicus.com (TSXV:TOI)
Topicus.com, a European-focused software acquirer and operator, saw its stock dip 17% in the past month, erasing its earlier rally. The decline followed the departure of Mark Leonard, founder of parent company Constellation Software, a move that initially rattled investors.
However, Topicus’ management team remains intact, and the company continues to execute its proven compounding acquisition strategy. Investors are closely watching upcoming earnings to gauge how the leadership transition affects performance—but the business fundamentals remain unchanged.
This recent pullback has pushed the stock’s forward P/E to 35, its lowest in five quarters. That valuation, coupled with Topicus’ consistent track record of EPS and free cash flow growth through accretive acquisitions, makes this a compelling buy-on-dip opportunity.
The Bottom Line
The TFSA is tailor-made for long-term compounders. Both Descartes Systems and Topicus.com offer durable business models, strong competitive advantages, and the ability to grow through cycles, making them excellent candidates to buy and hold for life.
For patient investors, these two stocks could compound tax-free gains for decades to come.
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