The Only Stock I’d Hold in a TFSA for Life

Finding the right mix of investments to hold in a TFSA can make a huge difference over the longer term. That means picking investments that are stable and can quietly compound without needing constant attention.

In other words, selecting investments that are predictable, offer low volatility and are tied to essential services that people rely on every day. This makes the choice of what to hold in a TFSA especially important for long-term success.

Regulated utilities fit this profile better than almost any other sector. They offer earnings that are set through long‑term regulatory frameworks. They also boast stable customer bases that generate cash flows which tend to hold up even when the broader market is under pressure.

When thinking of investments to hold in a TFSA, that level of durability becomes the most valuable trait a stock can offer.

And that utility stock to own and hold in a TFSA is Fortis (TSX:FTS).

Why Fortis stands out as a lifelong compounder

Among Canadian utilities, Fortis stands out as one of the best long-term compounders. Fortis operates a diversified portfolio of regulated electric and gas utilities across 10 regions that cover Canada, the U.S., and the Caribbean. This gives Fortis a wide and stable earnings base.

The business model is intentionally conservative, focused on regulated assets that generate predictable returns. Those predictable returns allow Fortis to consistently invest in growth initiatives while paying out a handsome quarterly dividend.

Speaking of dividends, Fortis offers one of the longest dividend‑growth streaks in Canada. Fortis has amassed 53 consecutive years of annual increases, making it one of just two Dividend Kings in Canada.

The dividend is supported by a steady capital plan that expands its asset base each year. As of the time of writing, that dividend carries a yield of 3.2%.

This means that even an $8,000 investment in Fortis today will generate several new shares each year from reinvestments alone.

This slow‑and‑steady approach adopted by Fortis is exactly what long‑term investors should look for in a stock to hold in a TFSA. It’s not flashy, but it compounds quietly and consistently.

All of this reinforces why Fortis remains one of the most dependable long-term compounders available to Canadian investors.

How Fortis delivers reliability through every market cycle

One of the most underrated advantages of Fortis is its defensive appeal, especially during market volatility. Utilities are defensive by nature, owing to their sheer necessity and simple business models.

That stability stems back to the fact that electricity and gas are needed irrespective of economic conditions. This means that earnings remain largely consistent from year to year.

That resilience has extended across multiple bouts of volatility. Fortis has even continued to increase its dividend during those challenging periods.

For investors who want a stock they can hold in a TFSA without worrying about short‑term noise, this reliability is a major advantage.

This combination of stability and resilience is exactly what long-term TFSA investors should prioritize.

Why Fortis fits perfectly inside a long‑term TFSA strategy

The TFSA is designed for long‑term, tax‑free compounding. Fortis aligns perfectly with that purpose. Dividend growth may be modest, but when those dividends are reinvested and allowed to grow tax‑free, the compounding effect becomes powerful over decades.

Utilities like Fortis aren’t meant to deliver explosive growth. Instead, they’re meant to deliver consistent, predictable returns that build wealth slowly and steadily.

Holding Fortis inside a TFSA also eliminates taxes on dividend income, which can make a huge difference over decades. For investors who prefer a hands-off approach, Fortis offers the kind of stability that allows you to set it and forget it while still benefiting from long‑term growth.

Over decades, this tax-free compounding can meaningfully accelerate wealth building in a way few other stocks can match.

The bottom line on choosing Fortis to hold in a TFSA

When you combine stability, dividend growth, predictable earnings, and a proven record of compounding, Fortis stands out as the one stock that fits the profile of a stock to hold in a TFSA. It doesn’t require constant monitoring, it performs well through market cycles, and it aligns perfectly with the long‑term nature of tax-free investing.

For anyone seeking a single dependable stock to hold in a TFSA, Fortis continues to stand out as the most reliable long-term choice.

The post The Only Stock I’d Hold in a TFSA for Life appeared first on The Motley Fool Canada.

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More reading

• 2 Dividend Stocks I’d Feel Comfortable Holding for the Next Two Decades
• Fortis vs. the Rest: How Does It Compare to Other Canadian Utility Stocks?
• The Everyday Companies Bay Street Is Ignoring — but Main Street Can’t Live Without
• 3 TSX Dividend Stocks With Payout Ratios That Actually Hold Up to Scrutiny
• 3 Stocks I’d Buy Today and Hold Comfortably All the Way to 2031

Fool contributor Demetris Afxentiou has positions in Fortis. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.