TFSA Investments: 2 Blue Chip Giants to Watch

One of the best financial tools available to Canadians is the Tax-Free Savings Account (TFSA). The TFSA investment offers significant savings over time over taxable accounts.

These savings build up over the long run and leave investors with far more pocket money. The problem is that the TFSA has a limited amount of contribution space each year.

As such, TFSA investments typically perform best when executed with a long-term perspective. That is, with a focus on blue chip stocks with reliable growth potential.

If you take too much risk within a TFSA, that contribution room can vanish, and then it’s gone forever. Instead, investors should be keen to add TSX blue chip stocks to increase their TFSA holdings.

Today, we’re going to look at two blue chip giants that Canadian investors should keep an eye on.

RBC

Royal Bank of Canada (TSX: RY) (NYSE: RY) is Canada’s largest bank, with a market capitalization of $ 152.76 billion. It has a wide range of revenue streams across the various products and services it offers to customers.

When it comes to investing in TFSA, RY is definitely a household name. It has a great track record for steady growth and a reliable but ever-growing dividend.

Now, given the current economic conditions, the stability of a stock’s dividend is even more important. However, investors can take comfort in the fact that RY has paid a dividend every year since it introduced one in 1870.

So while 2020 presented new challenges, RY has gone through all the ups and downs since 1870 and still offered value to investors. This also doesn’t look set to change anytime soon, as RY has a dividend payout ratio of only 54.76%.

Plus, with ample liquidity and a financial buffer, there’s really no reason to worry about RY’s dividend. As of this writing, it is yielding 4.02% and trading at $ 107.38.

While there will almost certainly be obstacles in the way in the short term, the long term outlook for RY is still overwhelmingly positive. It is the market leader in an important and steady industry in Canada.

If you are looking to raise stock of a reliable TSX blue chip stock that is ideal for TFSA investing, RY is a great choice.

Telus

Telus (TSX: T) (NYSE: TU) is a major player in the Canadian telecommunications sector, primarily through its subsidiary Telus Communications. It offers an assortment of services ranging from TV, Internet and mobile phone to entertainment and digital healthcare through Telus Health.

Telus is an ideal stock for TFSA investments, as it has a solid plan to increase its dividend in the coming years, as well as a good growth trajectory. Through its various offerings, it has built a wide range of income streams and growth opportunities.

As of this writing, Telus is trading at $ 24.79 and has a return of 5.02%. Given its five-year average yield is 4.4%, there is a bit of extra yield on the table for investors.

Although Telus has certainly suffered a hit this year, it is already changing things. While many stocks are still posting very negative revenue growth figures, Telus sports a figure of 7.2%.

Given its strong footing in the Canadian market, juicy dividends, and the potential for future growth (5G networks, digital healthcare expansions), Telus is a great choice for TFSA investments.

TFSA investment plan

If you’re looking to add some blue-chip stocks to your TFSA, these are two of the best. They offer great stability to accompany attractive dividends.

Over the long term, these stocks offer TFSA investors great total return potential, once tax savings and dividend composition are considered.

Be sure to keep an eye out for these TSX giants in the future.