TFSA Investors: 1 Set-it-and-Forget-it Stock for 2026

For Tax-Free Savings Account (TFSA) investors searching for a reliable stock to buy and hold for years, Loblaw (TSX:L) stock is one of the best set-it-and-forget-it investments for 2026 and beyond. While many stocks depend heavily on economic conditions, Loblaw operates businesses Canadians rely on every single day: groceries and pharmacy services. That combination gives the company a level of stability and resilience that long-term investors appreciate.

Loblaw: A defensive business built for long-term growth

Loblaw is Canada’s largest grocery and pharmacy operator, with a portfolio that includes Loblaws, Real Canadian Superstore, No Frills, and Shoppers Drug Mart. With more than 2,500 retail locations across the country, the company has built an unmatched national footprint and strong customer loyalty.

A big advantage of Loblaw’s business model is that demand remains steady regardless of the economic environment. Canadians still need groceries, household essentials, and prescription medications, whether the economy is booming or slowing down. During periods of uncertainty, defensive businesses like Loblaw often outperform because they generate dependable revenue and cash flow.

That stability makes the stock especially attractive for TFSA investors who want to improve portfolio resilience while still compounding wealth over time.

Loblaw’s solid financial results continue

Loblaw’s latest quarterly results reinforced why the company remains a dependable long-term investment. In the first quarter of this year, food retail same-store sales increased 2.4%, while drug retail same-store sales climbed 4.1%. Revenue rose 4.2% year over year, and gross profit increased 3.7% to $4.5 billion.

The company also delivered impressive growth in its profitability. Operating income surged about 21% to $1.0 billion, while adjusted EBITDA, a cash flow proxy, increased 6.5% to $1.6 billion. Adjusted net earnings climbed 5.5% to $578 million, and adjusted earnings per share (EPS) rose 8.9%.

Perhaps most importantly for long-term investors, cash flow from operations jumped 37% to $1.3 billion, while free cash flow more than doubled to $621 million from $215 million a year earlier. Strong and growing cash flow gives Loblaw the flexibility to reinvest in its operations, repurchase shares, and continue increasing dividends.

Why Loblaw stock makes the perfect fit in the TFSA

Over the past decade, Loblaw stock has quietly delivered exceptional shareholder returns — a compound annual growth rate (CAGR) of about 17%. In this period, Loblaw increased its adjusted EPS at a CAGR of 10.8%, while its dividend growth closely matched that pace at roughly 10.7% annually.

Although Loblaw stock’s dividend yield sits at about 1.0%, income investors should not overlook its long-term potential. Loblaw is more of a dividend-growth compounder than a high-yield stock. Investors who hold shares for many years could benefit from both rising dividends and meaningful capital appreciation inside a tax-free account.

At $60.31 per share at writing, the stock trades about 11% below the analyst consensus target, though it still commands a hefty premium relative to its historical valuation. For this reason, investors may want to build a position gradually through dollar-cost averaging rather than investing all at once.

Investor takeaway

For TFSA investors seeking a dependable, low-maintenance stock for 2026, Loblaw checks many important boxes: defensive operations, consistent earnings growth, strong cash flow, and long-term dividend increases. While it may not be the market’s most exciting stock, its stability and proven ability to compound shareholder value make it an excellent set-it-and-forget-it investment for patient Canadians.

The post TFSA Investors: 1 Set-it-and-Forget-it Stock for 2026 appeared first on The Motley Fool Canada.

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Fool contributor Kay Ng 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.