It can be so difficult to wade through all the literally thousands of companies on the border TSX when you’re looking for a solid purchase in a tax-free savings account (TFSA). All we want are no-brainer purchases. TFSA stocks whose share price will continue to rise, allowing us to sleep better and collect dividends at the same time. Is that too much to ask?
That could be, but luckily I did the hard work for you. Today, let’s take a look at why these two TFSA stocks are some of the best no-brainer stocks out there.
GSY
easy (TSX:GSY) may be one of the brightest, most overlooked opportunities for long-term TFSA investors right now. With a proven business model, decades of consistent growth, and a dividend that continues to rise, goeasy offers the kind of balance between income and capital growth that can turn $7,000 into serious wealth over time, completely tax-free.
goeasy operates as a non-bank lender specializing in consumer credit, offering personal loans and financing to Canadians who may not always qualify through traditional banks. Over the past decade, the company has grown its loan portfolio from just over $300 million to over $3.5 billion, while charge-offs remained stable. The stock’s performance was equally impressive. Over the past decade, goeasy has delivered a total return of over 1,000%, surpassing even some of Canada’s largest banks.
But despite that run, the company still looks attractively priced. Shares trade around 10 times earnings. The latest results once again exceeded expectations, with TFSA stock reaffirming its long-term growth targets. Add to that a 3.5% dividend yield that has been rising every year for a decade, and it’s a TFSA stock that fits perfectly into a long-term passive income portfolio.
H
Hydro One (TSX:H) is one of those rare TFSA stocks that combine safety, stable income, and long-term growth. It operates the critical infrastructure that keeps the province’s lights on, with more than 30,000 kilometers of transmission lines and 125,000 kilometers of distribution lines serving millions of customers. It is a regulated utility, meaning revenues are determined through long-term government-approved rate frameworks.
Additionally, Hydro One has demonstrated steady growth in both metrics since going public in 2015. The most recent quarter showed continued earnings stability and interest rate base expansion, with net income increasing modestly and management reaffirming its focus on efficiency and reliability improvements. Furthermore, these types of utilities tend to perform better when markets become choppy because their revenues are not dependent on consumer spending or global demand. Even during recessions, Hydro One’s cash flow remains steady, and its stock price often remains steady or even rises as investors flock to safety.
In terms of dividends, Hydro One offers a yield of around 2.5%, with a strong track record of annual increases. Management has increased the dividend every year since the IPO and the current payout ratio is around 61%, well within sustainable levels for a utility. That means investors can count on consistent, gradually increasing income without having to worry about budget cuts. Within a TFSA, these dividend payments are completely tax-free, giving you the full benefit of compounding without the burden of taxes.
In short
For TFSA investors looking for peace of mind, these are the kind of TFSA stocks you can hold indefinitely without worrying about market timing. So if you’re considering putting companies into your TFSA in the coming years, these are the perfect stocks to consider.
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