The best TSX stocks to buy in January 2026 if you want both income and growth

January is the time when many Canadians want a reset. You look at your tax-free savings account (TFSA), you look at the calendar and you think, “This year I want my money to do something.” The difficult thing is that you want growth and income at the same time. A beginner-friendly compromise is to own companies that can build for years, and let that compound build the portfolio value that can fund income later. So let’s look at two tech options that could do that in January.

TOI

Topicus.com (TSXV:TOI) is a growth-first story built around a simple idea: buy small, mission-critical software companies and run them for the long term. It focuses on vertical market software, often the unglamorous software that a niche industry uses every day. Yet boring software tends to be sticky. Customers do not simply switch. Over time, this can translate into stable cash generation that can be leveraged into more acquisitions and product improvements.

The latest earnings snapshot shows whether that engine is still running. For the third quarter ended September 30, 2025, Topicus reported revenues of €354.8 million, compared to €323.2 million a year earlier. The operating result increased from €64.6 million to €81.8 million and the net result amounted to €28.8 million. It also reported higher free cash flow in the quarter. For beginners, this cash line fuels future deals without relying too heavily on external financing.

The catch is that Topicus can feel pricey and can be left lying around. Recently it has been trading at an extremely high price-to-earnings ratio of 251 times earnings, which can happen when accounting earnings are not the best measure of a serial buyer’s underlying cash earnings, or when investors are pricing in years of growth. However, this is a long game stock. Keep the position size small enough that you can ride out a bad month without panicking. It’s not a dividend name, but reinvested money can later become income.

DSG

Descartes Systems Group (TSX:DSG) et ala software company, but it fulfills a different daily need. It sells logistics and trade compliance tools that help companies move goods, manage shipping networks and stay on top of cross-border regulations. That makes it a pick-and-shovel company for global trade. When the software is embedded in business operations, customers tend to innovate because pulling it out can be disruptive and risky.

The most recent quarterly release, for the third quarter of fiscal 2026 ending October 31, 2025, showed steady progress. Total revenue was $167.0 million, compared to $156.6 million a year earlier, and services revenue was $150.8 million versus $140.5 million. Operating profit increased from US$43.0 million to US$47.6 million, and diluted earnings per share (EPS) increased from US$0.41 to US$0.44. It also generated US$62.9 million in cash from operations in the quarter. That’s the kind of durability beginners should care about.

In terms of valuation and income, Descartes is the opposite of a returns play. Therefore, you trust that it will continue to develop and that the market will continue to reward its execution. Market data also shows it has a premium price, with a trading value of 48 times earnings at the time of writing, and an approximately 52-week trading range of around $110 to $178. That’s not a bargain stock. The price is comparable to that of a company that is expected to continue supplying even if the economy becomes unsettled. You can own it for growth and then harvest profits to buy dividend payers.

In short

Together, Topicus and Descartes could form a clean, modern Canadian tech pair for January. Topicus is the acquisition-driven composite company with more volatility and more profit if capital continues to be deployed well. Descartes is the more stable “infrastructure” software name associated with the way goods move around the world. Neither is a monthly paycheck today, but both can help you build the portfolio value that funds future income. Novice investors win by keeping it simple, buying sensible pieces and giving these companies years instead of weeks to prove themselves.