My #1 Forever TFSA Stock and Why I’ll Never Let It Go

Most investors can find a stock they’d like to own in their Tax-Free Savings Account (TFSA) today. But the harder question is whether they’d still be happy owning it 10, 20, or even 30 years from now.

A true forever stock for a TFSA needs more than strong recent performance. It should have a durable business model, exposure to long-term trends, and the ability to navigate challenges without constantly reinventing itself. Those qualities are surprisingly rare, especially in market sectors known for volatility. Yet one Canadian stock, Franco-Nevada (TSX:FNV), has built a structure that allows it to benefit from commodity markets while avoiding many of the risks that typically come with them.

In this article, I’ll explain why Franco-Nevada could be the kind of TFSA stock that investors can buy, hold, and rarely feel the need to second-guess.

A different way to own gold exposure

Simply put, Franco-Nevada is a Canada-based gold-focused royalty and streaming firm with a diversified portfolio across precious metals, other mining assets, and energy.

Over the last year, FNV stock has jumped by 37%, outperforming the broader market. As a result, it currently trades at $312.73 per share, giving the company a market cap of about $60 billion. Even after that rally, it remains nearly 20% below its 52-week high, leaving room for sentiment to improve if gold stays firm.

While its dividend yield of 0.8% may seem small, that is not the main reason to own the stock. Franco-Nevada’s real appeal is a combination of commodity upside, diversification, and a business structure that does not require it to shoulder the same operating risks as miners.

Why this business model can last

Notably, traditional miners can struggle when labour, fuel, equipment, and development costs rise. On the brighter side, Franco-Nevada is built differently. Its royalty and streaming model gives it exposure to gold, silver, and other commodities without requiring it to operate mines directly.

That difference showed up clearly in its latest results. In the first quarter of 2026, Franco-Nevada posted record revenue of US$651 million, up 77% from a year earlier. Its operating cash flow also surged by 80% year over year (YoY) to hit a record of US$520 million. Similarly, its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 84% YoY to US$592 million.

These big improvements clearly show how powerful this model can be when commodity prices are strong. Precious metals made up 87% of revenue in the quarter, with gold alone accounting for 67%. Yet the company also benefited from diversified assets, including iron ore, oil, and gas.

A stock built for patience

Of course, Franco-Nevada is not risk-free. The stock can still move with gold prices, investor sentiment, and issues at the underlying mines. The recent Burkina Faso stream dispute is a good reminder that legal and country-specific risks can still affect royalty and streaming firms.

Nevertheless, the bigger picture for Franco-Nevada remains attractive as it is debt-free, has a large portfolio of cash-flowing assets, and remains largely insulated from mine-level cost inflation. That makes it very different from a traditional mining stock.

The company also remains on track to sell between 510,000 and 570,000 gold equivalent ounces in 2026, excluding any potential contribution from Cobre Panamá. If Cobre Panamá’s stockpiled ore processing moves ahead as expected, Franco-Nevada could receive about 23,100 gold ounces and 265,000 silver ounces, with most deliveries expected in 2027.

Foolish bottom line

A forever TFSA stock should be durable, diversified, and easy to hold through market cycles. Franco-Nevada still checks those boxes for me. For investors who want one top Canadian stock they can tuck away in a TFSA and hold for years, Franco-Nevada remains one of the strongest choices on the TSX today.

The post My #1 Forever TFSA Stock and Why I’ll Never Let It Go appeared first on The Motley Fool Canada.

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More reading

• 1 Ideal TSX Gold Stock Down 17% to Buy and Hold for a Lifetime
• The TSX Is Facing a New Reality: 3 Stocks to Watch Now

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.