1 Canadian Stock to Buy and Hold Forever in a TFSA

Not every stock needs a revolutionary product or an artificial intelligence (AI) story to become a great Tax-Free Savings Account (TFSA) investment. Sometimes, boring companies that quietly sell everyday essentials end up delivering the most dependable returns over time. That’s especially true when the business keeps growing regardless of whether the economy is booming or slowing down.

One Canadian retailer has built exactly that kind of reputation. It continues attracting customers looking for affordable products, while disciplined expansion and strong execution keep driving earnings higher year after year. Investors may not always talk about it with the same excitement as high-growth tech stocks, but its long-term performance has been incredibly difficult to ignore. Let me explain why this reliable Canadian stock could deserve a permanent place inside a long-term TFSA portfolio.

Why Dollarama continues to stand out

If there’s one type of business that tends to quietly compound wealth over time, it’s a retailer that sells everyday essentials at prices people keep coming back for – and that’s exactly where Dollarama (TSX:DOL) fits in. It operates more than 1,700 stores across Canada, offering consumable products, seasonal merchandise, household essentials, and general goods at affordable fixed price points.

What makes Dollarama especially attractive is the underlying strength of its business model during both strong and weak economic conditions. When inflation pressures consumers or economic uncertainty rises, shoppers often become more value-conscious, which tends to drive more traffic toward discount retailers.

That defensive appeal has helped Dollarama stock consistently grow its business over the years. At the time of writing, the stock traded close to $172, giving the company a market capitalization of $47 billion. While its shares have gained just 6% over the last year, the company’s long-term track record remains extremely impressive as it has delivered 226% returns over the last five years.

Strong financial growth supports its outlook

In its fiscal year 2026 (ended in January), Dollarama’s annual sales climbed 13.1% year-over-year (YoY) to $7.3 billion. This growth was backed by comparable store sales gains, new store openings in Canada, and contributions from its Australian operations under The Reject Shop banner.

In Canada alone, its comparable store sales rose 4.2% YoY, driven mainly by strong demand for consumables and seasonal products. The company also expanded aggressively during the year by opening 75 net new stores in Canada.

Adding to the optimism, its profitability remained equally strong. Dollarama’s EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 13.5% YoY to $2.4 billion last fiscal year, while its operating profit climbed 13.3% to $1.9 billion. More importantly for investors, its diluted earnings jumped 13.7% to $4.73 per share.

These numbers clearly reflect the Canadian discount retailer’s operational efficiency and ability to maintain strong margins even while expanding internationally.

A long runway for future growth

One of the biggest reasons Dollarama looks attractive as a forever TFSA stock is its long-term expansion strategy. Beyond Canada, the company is actively growing its international footprint in Australia and Latin America. Its investment in Dollarcity continues to deliver strong results, with its fiscal 2026 net earnings from the segment rising 47.4% YoY.

Dollarcity’s expansion into Mexico could unlock another major growth opportunity for Dollarama in the years ahead. At the same time, the company’s acquisition of The Reject Shop in Australia gives it exposure to another established discount retail market.

While its quarterly dividend yield currently sits at around 0.3%, this TFSA stock’s real attraction is long-term capital appreciation backed by consistent earnings growth and expansion opportunities.

The post 1 Canadian Stock to Buy and Hold Forever in a TFSA appeared first on The Motley Fool Canada.

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* Returns as of April 20th, 2026

More reading

• Maximum TFSA Impact: 2 TSX Stocks to Help Multiply Your Wealth
• 1 TSX Consumer Stock That Could Bounce Back Fast
• How Canadians Should Be Using Their TFSA Contribution Limit in 2026
• TFSA vs RRSP: The Simple Rule Canadians Forget
• 5 Canadian Stocks to Hold for the Next Decade

Fool contributor Jitendra Parashar has positions in Dollarama. The Motley Fool recommends Dollarama. The Motley Fool has a disclosure policy.