Investing through a Tax-Free Savings Account (TFSA) offers Canadian investors a unique opportunity to generate tax-free capital gains and dividend income over time. With the contribution limit set at $7,000 for 2025, TFSA investors can make strategic moves to build wealth with tax-free returns. One of the most effective strategies is to invest in fundamentally strong stocks listed on the Toronto Stock Exchange (TSX) that have strong long-term growth potential. In this article, we will highlight three TSX stocks worth considering for TFSA investments.
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Aritzia (TSX: ATZ): A Fashion Retailer with Strong Growth Potential
Aritzia is a high-quality Canadian fashion retailer that continues to deliver impressive growth, making it a top choice for TFSA investors looking to benefit from capital appreciation. Since fiscal 2016, Aritzia has achieved consistent double-digit growth in both revenue and earnings. This success can be attributed to its strategy of offering exclusive fashion brands, expanding its boutique locations, and establishing a solid presence in high-growth markets. Additionally, Aritzia’s efficient supply chain has helped the company stay competitive in a dynamic retail landscape.
Aritzia’s stock has surged over 76% in the past year and more than 195% in the last five years. As the company continues to expand its presence in key markets, its growth trajectory remains strong. The company is set to open 8 to 10 new boutiques annually in the U.S. through fiscal 2027, which will significantly increase its retail footprint and bolster its brand recognition. Aritzia is also focusing on enhancing its e-commerce platform and omnichannel capabilities, which will drive further growth.
Given Aritzia’s robust financial performance and future growth prospects, TFSA investors can expect continued upside potential as the company expands its operations and strengthens its market position.
WELL Health Technologies (TSX: WELL): A Leader in Digital Healthcare
WELL Health is a rapidly growing digital healthcare company that presents an excellent opportunity for TFSA investors looking to gain exposure to the thriving healthcare sector. As a leader in digital health and telemedicine, WELL Health is benefiting from increased demand for its services, which include virtual healthcare, digital health solutions, and the growing adoption of its omnichannel platform. The company has been expanding its network of healthcare providers and making strategic acquisitions to enhance its presence in the digital healthcare space.
Operating within the defensive healthcare sector, WELL Health offers stability and growth potential. Its business model is not reliant on cross-border sales, which protects it from uncertainties related to U.S. tariffs on Canadian companies. With a strong focus on increasing patient visits and improving profitability, WELL Health has become a key player in Canada’s digital healthcare market.
Moreover, the company is reducing its debt and strengthening its balance sheet, which will support long-term growth. Despite its rapid expansion, WELL Health’s stock remains attractively priced compared to its growth prospects, making it an appealing investment for TFSA investors looking to diversify their portfolio with a healthcare stock.
Shopify (TSX: SHOP): A Global E-Commerce Giant with Massive Growth Potential
Shopify, a leading Canadian technology company, has been a standout performer in the e-commerce space. The company’s impressive growth is driven by a consistent increase in its Gross Merchandise Volume (GMV), a key metric of e-commerce success. In 2024, Shopify’s GMV growth surged by 24%, marking its highest growth in three years. Shopify’s profitability is also on the rise, with operating income showing significant improvement and the company reporting nine consecutive quarters of positive free cash flow.
Shopify is well-positioned to capitalize on the continued digital transformation of the retail industry. The company’s platform attracts a diverse range of global brands, and its expanding suite of products and services, including payment solutions, ensures that it remains a critical player in the global e-commerce landscape. Shopify’s shift towards an asset-light business model, along with its embrace of artificial intelligence (AI), will help it further streamline operations and improve profitability.
Additionally, Shopify is expanding its reach internationally, and the company’s increasing presence in offline retail and B2B channels will open up even more avenues for growth. For TFSA investors, Shopify offers significant long-term growth potential, making it an attractive option for those seeking exposure to the booming e-commerce sector.
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Conclusion: Capitalizing on Growth with TSX Stocks in Your TFSA
Investing in high-quality TSX stocks through a Tax-Free Savings Account (TFSA) is an effective strategy for building long-term wealth with tax-free gains. Aritzia, WELL Health, and Shopify are three strong contenders for TFSA investors looking to capitalize on growth in the fashion, healthcare, and technology sectors. Each of these companies has demonstrated strong financial performance and has promising future growth prospects. By adding these stocks to your TFSA portfolio, you can potentially enjoy significant tax-free capital appreciation and dividend income for years to come.