FNV - 4 Dynamic Companies for a 7-Digit TFSA Portfolio
If you have been filling up your TFSA to the brim, you could have a little over $80,000 in it right now, and though it’s not even a six-digit figure, you can turn it into a seven-digit nest egg with the right assets and enough time.
An energy stock
While wild-card assets like Crew Energy (TSX:CR) may not seem like the best option for long-term, predictable growth, they can often offer more boost in a matter of years than many consistent stocks do in a decade. The current, sector-driven post-pandemic growth of the stock is an excellent example of its powerful growth potential (under the right circumstances).
The stock fell quite a bit during the pandemic, but its growth since that time has been nothing short of phenomenal. It has grown its market value by about 2,000% since its lowest point during the crash. If you invest about $20,000 in the company when it next dips and it offers just half of its 2020-2022 growth spurt (1,000% appreciation) any time in the next two decades, you could grow your capital by $200,000 in one go.
A financial stock
TMX Group (TSX:X) , the company that owns and operates most of the major stock exchanges in Canada, is a powerful long-term growth candidate. Apart from a few dips and recoveries, the stock has mostly gone up since 2010, but it has really picked up pace in the last five years. The five-year CAGR is currently 16.5%. This growth pace is quite sustainable, especially considering the company’s current valuation.
And though it may seem a bit optimistic, if the company can keep growing at this pace, i.e., increasing your capital by a margin of about 16% every year, you can amass a nest egg of well over $300,000 in the next two decades by investing $20,000 in the company. And that’s on top of the $500 you would receive every year in dividends (based on its current yield) from the company.
A golden stock
Adding a gold stock to your TFSA for stability is an intelligent idea. Still, if it’s a typical gold stock that only outperforms the market during economically harsh environments, it will weigh down the growth potential of your capital. So you have to pick a robust grower like Franco Nevada (TSX:FNV) (NYSE:FNV) . The gold royalty giant in North America, with a geographically and asset-wise diverse portfolio of royalties, is one of the most powerful growth stocks in the sector.
The company returned about 364% to its investors in the last decade. If it’s capable of repeating this feat for the next two decades, you may be able to turn your $20,000 in the company to a bit over a quarter of a million.
A real estate services company
FirstService (TSX:FSV) (NASDAQ:FSV) is perhaps the most potent growth stock on this list. Ever since its inception, the stock has grown at an incredible rate, till now. Currently, it’s experiencing a dip, which makes it a perfect time to add this benevolent growth stock to your portfolio. Because even with the current 22% dip, the stock has returned about 176% to its investors in the last five years.
If it can maintain its five-year CAGR of 22.5%, it can turn a $20,000 investment into about a quarter of a million in 13 years. But even if it doesn’t perform as well as it has before, it might still be able to achieve that number in a matter of two decades.
Foolish takeaway
The four growth stocks , if they stick to the best-case scenario, can turn your $80,000 investment into a million dollars in two decades. That’s more than 12.5 times growth over 20 years. However, even if your nest egg doesn’t reach the most optimistic size, you can still likely grow it to considerable proportions with these companies.
The post 4 Dynamic Companies for a 7-Digit TFSA Portfolio appeared first on The Motley Fool Canada .
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends FirstService Corporation, SV and TMX GROUP INC. / GROUPE TMX INC.
2022