Secure Your Future Home With These Stocks in Your FHSA

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Written by Jed Lloren at The Motley Fool Canada

If you’ve never bought a home, then things just got a little better for you. In April, the Canadian government released the First Home Savings Account (FHSA). As its name suggests, Canadians can only use one of these accounts if they haven’t bought a home previously. This new account is very attractive, because it combines the benefits of the Tax-Free Savings Account and the Registered Retirement Savings Plan. In this article, I’ll discuss three top stocks to hold in a FHSA.

This tech stock could help you save up

If I could only choose one Canadian stock to hold in a FHSA, it would be Constellation Software (TSX:CSU). This company is a tech conglomerate that acquires vertical market software (VMS) businesses. For much of its history, Constellation Software has focused on small- and medium-sized businesses. Over the past couple of years, the company has expanded its scope to include the acquisition of large VMS businesses.

In terms of stock performance, it doesn’t get much better than what Constellation Software has managed since its initial public offering (IPO). Since 2006, this stock has gained more than 14,600%! That means an investment of $10,000 made at Constellation Software’s IPO would be worth well over $1 million today. Over the past year, Constellation Software stock has gained nearly 38%. That indicates that, despite the company’s current size, it shows no signs of slowing down in terms of growth.

If you’re looking for a stable company, consider this

Fortis (TSX:FTS) is another stock that I hold in my portfolio. I like this company because of the stable and predictable nature of its business. For those that are unfamiliar, Fortis provides regulated gas and electric utilities to more than three million customers across Canada, the United States, and the Caribbean. As you may know, utility bills tend to be paid on a recurring basis. That steady source of revenue allows Fortis to plan for dividend distributions many years ahead of time.

Speaking of its dividend, Fortis is one of the most impressive companies in Canada in that regard. The company is listed as a Canadian Dividend Aristocrat, which means it has managed to increase its dividend for at least five consecutive years. However, Fortis far exceeds that minimum requirement. It holds the second-longest active dividend-growth streak in Canada (49 years). The company has already announced its plans to continue increasing its dividend at a rate of 4-6% through to 2027.

A reliable stock for your portfolio

Finally, investors should consider holding Canadian National Railway (TSX:CNR) in their FHSA. This is one of the most recognizable companies in the country, thanks to its rail network, which spans from British Columbia to Nova Scotia. All considered, Canadian National operates nearly 33,000 km of track.

I like this stock for two reasons. First, it provides investors with growth potential. Over the past five years, Canadian National stock has gained nearly 50%, dividends excluded. Second, this company offers investors a very attractive dividend. Although it only yields about 1.93%, Canadian National’s dividend is growing very quickly. Over the past 26 years, Canadian National’s dividend has grown at a compound annual growth rate of about 16%.

The post Secure Your Future Home With These Stocks in Your FHSA appeared first on The Motley Fool Canada.

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Fool contributor Jed Lloren has positions in Constellation Software and Fortis. The Motley Fool recommends Canadian National Railway, Constellation Software, and Fortis. The Motley Fool has a disclosure policy.