How I’d Use My $7,000 TFSA Contribution to Start Retirement Planning

TSX stock #1

goeasy (TSX:GSY) is an attractive long-term stock to buy and hold in a TFSA for a comfortable retirement. The subprime lender’s stock offers value, income, and growth, making it a compelling bet. Thanks to its ability to generate impressive financials, this financial services company has outperformed the TSX with its capital gains. For instance, goeasy stock has posted a staggering 326.8% increase in the last five years, reflecting a compound annual growth rate (CAGR) of about 33.6%, far exceeding the broader market’s average annual returns.

Beyond capital gains, it returned more cash to its shareholders through increased dividend payments. The company has paid dividends for 21 consecutive years and raised them for 11 years. Moreover, it offers a decent yield of 3.9% near the current price levels.

The company’s wide product range, omnichannel offerings, and diversified funding sources will drive loan originations and its top line. Moreover, higher sales, steady credit performance, a focus on high-quality loans, and operating efficiency will cushion its bottom line and support higher dividend payouts.

While goeasy is poised to deliver solid growth and income, its stock trades cheaply on the valuation front, providing a buying opportunity.

TSX stock #2

Hydro One (TSX:H) is another attractive stock TFSA investors could consider investing in to meet retirement goals. Hydro One is involved in electric power transmission and local distribution, which makes it a defensive stock. Also, the utility company is not exposed to commodity price fluctuations as it is not involved in power generation. This adds operational stability, enabling it to grow its earnings consistently regardless of market conditions.

Thanks to its growing earnings, Hydro One stock has soared about 109.8% over the past five years, delivering a CAGR of around 16%. In addition to capital gains, the company regularly enhances its shareholders’ value through consistent dividend growth. Hydro One has increased its dividend since 2016, driven by its low-risk earnings base, growing rate base, and robust cash flows.

Hydro One’s defensive business model and strong balance sheet will continue to support the company’s strategic investments in upgrading aging infrastructure without external equity funding. Further, expanding the rate base will boost its earnings, enabling it to increase its dividends. The company projects its rate base to rise at a CAGR of 6% through 2027. This will lead to a 5–7% annual increase in its earnings and a 6% growth in dividends.

TSX stock #3

Brookfield Asset Management (TSX:BAM) is another solid bet to generate significant total returns over time. This alternative asset manager benefits from its investments in high-quality businesses across diverse geographies and industries.

Brookfield will benefit from investments in high-growth sectors such as artificial intelligence (AI) infrastructure and green energy. Further, its expansion into the private credit market bodes well for future growth.

Brookfield has recently raised significant capital, which will likely strengthen its investment capacity and drive substantial revenue and margin growth. Moreover, the global investment firm’s asset-light balance sheet and predictable earnings position it well to deliver strong total returns in the long run.

Its disciplined cost management will likely deliver double-digit earnings growth in 2025 and beyond, supporting higher payouts and a higher share price. Currently, BAM yields 3.8% near the current market price.