With the TFSA contribution limit of $7,000 for 2025, these are the best Canadian stocks with fundamentally strong businesses to buy now.
Top Canadian Stocks #1: MDA Space Stocks
MDA space (TSX:MDA) could be a solid addition to your TFSA portfolio. Shares of this space technology company have seen turbulence lately, but the recent sell-off could be an attractive entry point for long-term investors. The stock has fallen more than 40% in the past three months, mainly due to concerns about large contracts. The decline began after EchoStar canceled a multibillion-dollar satellite contract and sold its spectrum licenses to SpaceX. Concerns mounted when reports suggested that Globalstar, one of MDA’s key customers, may have initially been in discussions with SpaceX about a potential sale.
This led to fears that if SpaceX were to acquire Globalstar, future satellite contracts could be moved in-house given SpaceX’s manufacturing capabilities. Notably, MDA announced earlier this year a $1.1 billion contract with Globalstar to build more than 50 digital satellites.
Fundamentally, MDA remains in a strong position. The company is a leader in the field of digital satellite systems, robotics and geo-intelligence. Sustainable investments are expected to occur in these areas as both governments and private companies expand their presence in the space. The diversified offering and solid balance sheet provide the financial flexibility to innovate and capitalize on growth opportunities.
The broader space economy continues to accelerate, driven by demand for communications, defense and Earth observation solutions. MDA’s ability to deliver cost-competitive, high-performance systems positions the company to benefit from this secular trend.
With third quarter results due soon, investors will have a better understanding of the backlog and growth trajectory. But for now, the recent dip appears to be a market overreaction rather than a reflection of weakness.
Top Canadian Stock No. 2: Enbridge
Enbridge (TSX:ENB) is another top Canadian stock to buy at $7,000. The company operates one of the largest oil and gas pipeline networks in North America. In addition, it operates natural gas utilities and has a growing portfolio of renewable energy assets. This integrated business model helps protect Enbridge against the volatility of commodity prices and economic cycles.
Additionally, revenues are supported by long-term, low-risk contracts with high system utilization, allowing the company to consistently generate robust revenues and distributable cash flow (DCF).
Thanks to its resilient and growing earnings base, Enbridge has increased its dividend for 30 years in a row. Furthermore, ENB’s dividend grew at a compound annual growth rate (CAGR) of 9% during this period. Currently it offers a yield of around 5.8%, which is still well covered, with a payout ratio between 60% and 70% of the DCF.
The company’s management expects to continue dividend growth at mid-single digits, with plans to pay between $40 billion and $45 billion in dividends over the next five years.
While Enbridge has rewarded investors with stable payouts, it has also delivered decent capital gains. Over the past five years, Enbridge shares are up more than 151%, reflecting a CAGR of 20.3%. The company’s extensive pipeline network and growing portfolio of utilities and renewable energy positions it well for continued financial and share price gains.
Additionally, Enbridge’s infrastructure is becoming increasingly valuable as North America experiences a surge in energy demand, driven by industrial activity, electrification and the rise of artificial intelligence (AI) and data centers. The Renewable Energy Division already supplies power to major AI and data center operators, with more than ten additional data center projects currently in advanced stages of development. This provides a solid foundation for growth and supports the dividend and share price.
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