Whereas it’s straightforward to unfold your Tax-Free Financial savings Account (TFSA) investments too skinny attempting to seize features from each market sector, there’s a greater strategy to go about it. What if only one Canadian inventory, with an extended historical past of sturdy progress, a rock-solid enterprise mannequin, and stable future progress fundamentals, have been sufficient to energy your TFSA into seven figures?
Dollarama (TSX:DOL) has quietly accomplished simply that. It might not be one of the vital standard shares on the Toronto Inventory Trade, however its efficiency speaks louder than any pattern. Optimistic double-digit returns in 14 of the final 15 years and a enterprise mannequin that continues to develop in new areas, even amid macroeconomic uncertainties, make it a critical long-term buy-and-hold inventory, particularly for TFSA buyers who wish to keep away from taking pointless dangers.
On this article, I’ll speak about why Dollarama may simply be the one prime inventory for TFSA you’ll want in your portfolio.
Why Dollarama might be your TFSA’s long-term winner
To place it merely, Dollarama’s enterprise is constructed on one easy promise — worth pricing. As Canada’s main low cost retailer, it operates over 1,600 shops nationwide and not too long ago expanded its attain to seven international locations by way of its subsidiaries. With its newest transfer into Australia by way of the acquisition of The Reject Store, the Canadian low cost retailer has taken its confirmed mannequin international.
This TFSA-friendly inventory at the moment trades at $180.30 per share, giving the corporate a market cap of $49.5 billion and a small however constant annualized dividend yield of round 0.23%. Whereas that dividend won’t appear spectacular, Dollarama’s energy primarily lies in its constant share value appreciation. Over the past yr alone, the inventory has surged practically 25%, extending its five-year acquire to greater than 280%.
Spectacular monetary progress pattern reveals the momentum
Within the second quarter of its fiscal 2026 (three months resulted in July), the retailer reported a ten.3% YoY (year-over-year) enhance in its gross sales to $1.72 billion. This top-line progress is primarily pushed by its sturdy same-store gross sales progress in Canada and early contributions from its new Australian enterprise. Notably, its comparable retailer gross sales in Canada rose 4.9% YoY, with the assistance of elevated demand for consumables.
Consequently, the corporate’s adjusted EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortization) climbed over 12% YoY to $588.5 million. Its strengthening profitability clearly reveals how properly Dollarama manages prices even because it expands its retailer community and absorbs the short-term affect of latest acquisitions.
Progress-oriented growth technique
Dollarama’s latest acquisition of The Reject Store marks its first entry into the Australian market, including practically 400 shops and opening the door to one of many world’s most tasty low cost retail areas. In the meantime, its Latin American companion Dollarcity is increasing quick, because it not too long ago opened its first retailer in Mexico and reached 658 shops throughout 5 international locations.
With the assistance of this growth technique, Dollarama’s environment friendly sourcing mannequin, fixed-price construction, and disciplined value management at the moment are being replicated in new markets the place customers are simply as value-focused as Canadians. And that appears to be a terrific components for sustainable international progress.
Why it suits completely right into a TFSA technique
For TFSA buyers, long-term consistency and tax-free compounding are two predominant objectives. And Dollarama’s mixture of stability, growth prospects, and confirmed inventory efficiency makes it the highest inventory for TFSA buyers who need long-term, low-stress returns on their hard-earned cash.
