2 Long-Term Growth Stocks to Buy Right Now

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The Tax Free Savings Account (TFSA) has been a boon to Canadian investors since it was introduced in 2009. TFSA investment allows you to enjoy the returns on your investments held in the account without incurring income taxes. Using the contribution room to buy and hold growth stocks can allow you to enjoy substantial growth in wealth without paying capital gains taxes.

As of this writing, the S&P/TSX Composite Index it is down 12.60% from its 52-week high. The current pullback has allowed him to invest in growth stocks at deep discounts. Choosing the right growth stocks is critical to successfully enjoying this long-term wealth growth strategy in a TFSA.

You should invest in companies that are more likely to generate strong long-term returns through capital gains. The underlying businesses must have strong fundamentals that can support long-term growth potential. Here I will discuss two growth stocks you may consider adding to your TFSA portfolio for this purpose.

constellation software

constellation software (TSX:CSU) is a Canadian software company with a market capitalization of $42.13 billion. It specializes in acquiring and growing small and medium-sized vertical market software companies.

The company also develops specialized software solutions to address specific problems for clients in various industries. It has achieved substantial growth over the years due to its successful acquisition strategy and organic growth.

Constellation Software has a diversified customer base that mitigates many of the risks you would face operating in a specific niche. At the time of this writing, Constellation Software stock is trading at $1,987.85 per share.

It seems like a high price point, but it is down 16.67% from its 52-week high. Analysts anticipate that its bottom line will expand by 20% in the next five years. Investing in your stocks at current levels can set you up for stellar long-term returns.

Aritzia

Aritzia (TSX:ATZ) is a fashion brand with a market capitalization of $5.13 billion founded in 1984. Based in Vancouver, Aritzia designs apparel and accessories for its extensive collection of exclusive brands.

It started out as a multi-channel retailer but began to gain ground in the growing e-commerce industry. The company has expanded its presence in the US and its border footprint continues to grow.

It has a track record of remaining profitable and generating excellent organic growth. The company’s strong financials are supported by its free cash flow and it is using its strong position to seek further growth.

Aritzia has started to increase its investments in several strategic growth drivers, including geographic expansion, product innovation, brand awareness and its e-commerce segment.

Analysts expect company sales to reach $1.9 billion in 2023 and $2.16 billion in 2024. At the time of writing, Aritzia shares are trading at $45.67 per share, up 24.68 % less than your 52-week maximum. Investing in its stock at current levels can set you up for significant wealth growth if the company lives up to analyst expectations.

silly takeaway

The TFSA has become a popular registered account due to its tax-advantaged status. Remember that investing in growth stocks carries a higher degree of capital risk than the more “boring” blue chip stocks.

However, it is important to offset the volatility of high-risk assets by adding more stable assets to your portfolio to create a well-balanced investment basket in your TFSA.

Aritzia shares and Constellation Software shares can be excellent additions to your portfolio if you are looking for long-term, tax-free wealth growth.

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