FHSA Investors, Rejoice! The Top 3 Stocks to Supercharge Your Home Savings

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Are you saving up for your first home? Have you heard of the First Home Savings Account (FHSA)? This is a new tax-advantaged account that Canadians were given access to earlier this year. Using one of these accounts, Canadians can combine the benefits of a Tax-Free Savings Account (TFSA) and an Registered Retirement Savings Plan (RRSP). That makes it one of the best ways to save up for a home. However, it’s also just as important to hold the right stocks in your FHSA.

In this article, I’ll discuss three top stocks to supercharge your home savings.

Start with this outstanding tech stock

Constellation Software (TSX:CSU) is the first stock I’d suggest that Canadians hold in an FHSA. I’d argue that this stock is almost a no-brainer. Since its initial public offering (IPO) in 2006, very few stocks have been able to keep up with its performance. Constellation Software stock has gained more than 14,600% since listing on the TSX. Despite those strong gains, it shows no signs of slowing down. Over the past year, Constellation Software stock has gained 24%.

For those that don’t know, Constellation Software acquires vertical market software (VMS) businesses. Historically, it has focused on small- and medium-sized businesses. However, constantly innovating, Constellation Software has begun to incorporate the acquisition of large VMS businesses into its portfolio. Still led by its founder, Mark Leonard, I strongly believe this is a stock that belongs in every Canadian’s portfolio.

Invest in well-established companies

If Constellation Software isn’t the stock for you, then don’t worry. The Canadian stock market offers a wide array of outstanding companies to invest in. FHSA investors should focus on finding companies that are well established and offer a significant competitive advantage over their peers. For example, Canadian National Railway (TSX:CNR) would be a great stock to consider. Operating nearly 33,000 km of track, this is the largest railway company in Canada.

Canadian National stock has done very well since its IPO, gaining more than 7,000%. That return becomes even more impressive if investors were to include gains generated via its dividend. Speaking of which, Canadian National has managed to increase its dividend distribution in each of the past 26 years. That makes it one of only 11 TSX-listed stocks to currently lay claim to that feat.

If dividends are something you’re interested in

Speaking of dividends, Fortis (TSX:FTS) would be a great stock to consider for your FHSA if that’s something you’re interested in. Dividend stocks tend to be less volatile, making them appealing stocks to hold for the purposes of saving up for a house. When it comes to dividend stocks, Fortis is among the best.

This company has managed to increase its dividend distribution in each of the past 49 years. That gives Fortis the second-longest active dividend-growth streak in Canada. The company has already announced its plans to continue raising its dividend through to at least 2027. This stock has gained about 24% over the past five years, dividends excluded, making it a great stock to hold in your FHSA.

The post FHSA Investors, Rejoice! The Top 3 Stocks to Supercharge Your Home Savings appeared first on The Motley Fool Canada.

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See the 5 Stocks
* Returns as of 8/16/23

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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.