The Best TSX Stocks to Buy in January 2026 if You Want Both Income and Growth

January is when a lot of Canadians want a reset. You look at your Tax-Free Savings Account (TFSA), you look at the calendar, and you think, “This year, I want my money doing something.” The tricky part is wanting growth and income at the same time. A beginner-friendly compromise is to own companies that can compound for years, and let that compounding build the portfolio value that can fund income later. So, let’s look at two tech options that could provide that in January.

TOI

Topicus.com (TSXV:TOI) is a growth-first story built around a simple idea: buy small, mission-critical software companies and run them for the long haul. It focuses on vertical market software, which is often the unglamorous software a niche industry uses every day. Yet boring software tends to be sticky. Customers do not switch lightly. Over time, that can translate into steady cash generation that can be redeployed into more acquisitions and product improvements.

The latest earnings snapshot helps show whether that engine is still humming. For the third quarter ended Sept. 30, 2025, Topicus reported revenue of €354.8 million versus €323.2 million a year earlier. Operating income rose to €81.8 million from €64.6 million, and net income was €28.8 million. It also reported higher free cash flow in the quarter. For beginners, that cash line fuels future deals without relying too heavily on outside financing.

The catch is that Topicus can feel pricey, and it can swing around. Recently, it traded with an extremely high price-to-earnings ratio of 251 times earnings, which can happen when accounting earnings are not the best measure of a serial acquirer’s underlying cash earnings, or when investors are pricing in years of growth. However, this is a long-game stock. Keep the position size small enough that you can hold through a bad month without panicking. It’s not a dividend name, but reinvested cash can become income later.

DSG

Descartes Systems Group (TSX:DSG) is also a software company, but it serves a different everyday need. It sells logistics and trade-compliance tools that help companies move goods, manage shipping networks, and stay onside with cross-border rules. That makes it a “pick-and-shovel” business for global trade. When the software is embedded in operations, customers tend to renew because ripping it out can be disruptive and risky.

Its most recent quarterly release, for the third quarter of fiscal 2026, ended Oct. 31, 2025, showed steady progress. Total revenues were US$167.0 million, up from US$156.6 million a year earlier, and services revenues were US$150.8 million versus US$140.5 million. Income from operations increased to US$47.6 million from US$43.0 million, and diluted earnings per share (EPS) rose to US$0.44 from US$0.41. It also generated US$62.9 million of cash from operating activities in the quarter. That’s the kind of durability beginners should care about.

On valuation and income, Descartes is the opposite of a yield play. Therefore, you’re relying on it compounding and the market continuing to reward execution. Market data also shows it is priced at a premium, trading at 48 times earnings at writing, and a 52-week trading range of about $110 to $178. That is not a bargain-bin stock. It’s priced like a company expected to keep delivering even if the economy gets choppy. You can own it for growth, then harvest gains to buy dividend payers.

Bottom line

Together, Topicus and Descartes can make a clean, modern Canadian tech pairing for January. Topicus is the acquisition-driven compounder with more volatility and more upside if it keeps deploying capital well. Descartes is the steadier “infrastructure” software name tied to how goods move around the world. Neither is a monthly paycheque today, but both can help you build the portfolio value that funds future income. Beginner investors win by keeping it simple, buying in sensible chunks, and giving these businesses years, not weeks, to prove themselves.

The post The Best TSX Stocks to Buy in January 2026 if You Want Both Income and Growth appeared first on The Motley Fool Canada.

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More reading

• 1 Magnificent Canadian Tech Stock Down 38% to Buy and Hold for Decades
• Top Canadian Stocks to Buy With $2,000 Right Now
• The No-Brainer Canadian Stocks I’d Buy With $5,000 Right Now
• 3 TSX Stocks That Could Triple in 5 Years 
• Here’s the CPP Contribution Your Employer Will Deduct in 2026 

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Topicus.com. The Motley Fool recommends Descartes Systems Group. The Motley Fool has a disclosure policy.