Many Canadian stocks have delivered above-average total returns over the long term, creating significant wealth for their shareholders. These are companies with solid fundamentals and strong growth prospects. By diversifying investments across these stocks and different sectors, one can reduce risk and smooth returns, even when certain parts of the market face challenges.
Additionally, if these TSX shares are held in a tax-free savings account (TFSA), the rewards become even more attractive. Within a TFSA, all capital gains and dividend income grow completely tax-free, allowing investors to keep more of what they earn and accelerating wealth creation.
With that strategy in mind, here are three top Canadian stocks I would buy and hold forever.
Shopify inventory
Shopify (TSX:SHOP) is one of the best TSX stocks to buy and hold forever, thanks to its proven ability to generate outsized returns. Over the past decade, the e-commerce platform provider has posted gains of approximately 5,294%, and despite this rapid rise, its growth trajectory is far from over. The global shift to digital and multichannel retail continues to accelerate, positioning Shopify to take advantage of a significant growth opportunity.
The Canadian tech giant’s unified commerce platform is attracting sellers of all sizes, with major retailers increasingly using its tools to drive online and offline sales. Furthermore, its focus on innovation and the launch of new products positions the company well to take advantage of the opportunities arising from digital transformation. In addition, Shopify focuses on operational efficiency to achieve sustainable profitability in the long term.
Shopify is also expanding into offline and business-to-business markets, with strong growth in gross merchandise volume through these channels. By diversifying its reach and strengthening its ecosystem, Shopify continues to strengthen its position in omnichannel commerce, making it a solid stock to hold for the long term.
Dollarama shares
Dollarama (TSX:DOL) is a top TSX stock to buy and hold forever. It offers a mix of stability, growth and income. It operates a discount store chain, which sells products at low and fixed prices. The value pricing strategy and extensive range of consumables enable Dollarama to drive traffic, retain customers and achieve steady, comparable sales growth in all market conditions.
Although Dollarama operates defensively, the retailer has consistently outperformed the Canadian benchmark index by a wide margin. For example, Dollarama stock is up about 263% over the past five years, reflecting a compound annual growth rate (CAGR) of 29.4%. Moreover, it has increased its dividend every year since 2011.
Dollarama is likely to continue its growth trajectory in the coming years. Dollarama’s strong supply chain, competitive prices and extensive product range position the company for further growth. New store openings and international expansion further strengthen the outlook and support sales, dividend and share price growth.
Enbridge shares
Enbridge (TSX:ENB) is a reliable long-term stock for income and growth. This North American energy infrastructure giant operates oil and gas pipelines, natural gas companies and renewable energy projects. The company’s diversified operations and high system utilization allow it to generate stable distributable cash flow (DCF), supporting higher dividend payments and growth.
It is striking that 98% of ENB’s EBITDA comes from regulated activities or long-term contracts. Regulatory safeguards and low-risk commercial arrangements protect profits, allowing dividends to grow even during economic turbulence. Thanks to resilient earnings and DCF, Enbridge has increased its dividend at a CAGR of 9% for 30 consecutive years.
Enbridge is well positioned to continue growing its dividend. In addition, its financials and share price are likely to get a boost from rising energy demand, driven by data center projects and energy transition opportunities. In short, Enbridge is a reliable income stock with long-term growth potential.
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