Build a $7,000 portfolio? Start with these 2 Canadian stocks

If you plan to build a $7,000 investment portfolio, it makes sense to anchor it in Canadian stocks that can deliver reliable total returns over the long term (combination of price appreciation and dividends). Notably, a number of fundamentally strong TSX-listed stocks have consistently delivered stable capital gains and higher dividends, making them attractive investments.

Additionally, purchasing and holding these TSX stocks in a tax-free savings account (TFSA) can help you generate tax-free capital gains and dividends, boosting your long-term returns.

With this background, here are two Canadian stocks currently investing $7,000.

Best Canadian Stock #1: Dollarama

Dollarama (TSX:DOL) is one of the best Canadian stocks to add to your TFSA portfolio for growth, income, and stability. After rising about 47% in 2024, shares of this discount retailer are up more than 41% so far this year. Furthermore, Dollarama shares have grown at a compound annual growth rate (CAGR) of 31.7% over the past five years, generating a capital gain of 296%.

Along with this solid capital growth, Dollarama has consistently increased its dividend in recent years, delivering significant total returns.

It offers a wide mix of daily necessities and general merchandise at low fixed prices. This value proposition continues to attract visitors to the stores under all market conditions and adds stability to the activities.

The value retailer continues to expand its store network in Canada and internationally, adding locations with rapid return on investment. The move to third-party delivery platforms demonstrates the company’s ability to adapt to changing shopping habits, adding convenience and opening up new channels for incremental sales.

A broad product range, which includes branded and private-label offerings, helps Dollarama maintain healthy margins while appealing to diverse customer segments. Direct purchasing from suppliers strengthens cost control and increases competitive advantage. The recent acquisition of Australia’s The Reject Shop further expands its global reach and provides meaningful geographic diversification.

Overall, Dollarama is a solid stock for investors looking for above-average long-term total returns and stability in their portfolios.

Best Canadian Stock #2: Hydro One

Hydro One (TSX:H) is another high-quality Canadian stock that offers growth, income and stability. The utility company focuses on the transport and distribution of electricity and operates within a regulated framework. This operating structure protects the company from economic downturns, commodity price fluctuations and volatility in energy generation. Because its assets are regulated, Hydro One generates stable, predictable income, which supports both the share price and dividend.

Thanks to a steadily growing interest base, the company has consistently increased its dividend. From 2016 to 2022, the dividend grew at a CAGR of 5%, and since then it has grown closer to 6% per year. In addition to providing stable cash, Hydro One shares have also delivered solid capital gains. The stock is up 124.6% over the past five years, reflecting a CAGR of 17.6%.

Looking ahead, Hydro One’s rate base is expected to increase by approximately 6% annually through 2027. That growth will boost earnings and support continued dividend increases.

Hydro One is poised to capitalize on its self-financed projects to modernize aging infrastructure, expand transmission capacity and integrate renewable energy sources. With demand for electricity increasing due to population growth, industrial development and the shift to clean energy, Hydro One is well positioned to deliver long-term growth and revenue with low risk while maintaining the stability that investors can rely on.