If you’ve been following the stock market, you’re likely aware of its inherent cyclical behavior, influenced by several factors that can create bull markets or significant downturns. While some high-growth stocks thrive under favorable conditions, they can see sharp declines when the environment changes. However, not every stock is suitable for holding through these market cycles. There are particular stocks, known as “forever stocks,” that can be excellent long-term investments, especially for those utilizing Tax-Free Savings Accounts (TFSAs).
The TFSA is an appealing investment vehicle due to its tax-free compounding benefits and the ability to withdraw funds without tax penalties. Among potential forever stocks, one that stands out for TFSA investors is Dollarama (TSX:DOL).
Forever stocks need to exhibit qualities that support their longevity as stable growth investments. Dollarama exemplifies this, boasting a significant market capitalization of approximately $53.73 billion. The company operates the largest chain of discount retail stores in Canada, offering everyday consumer goods, general merchandise, and seasonal items at prices lower than many competitors.
Currently, Dollarama runs around 1,600 stores across Canada, with plans to expand further. The company’s reach has also extended into Latin America with Dollarcity and recently into Australia, positioning it for future growth.
The crux of Dollarama’s business model lies in its ability to provide essential items at budget-friendly prices. In challenging economic times, when consumers are more inclined to reduce spending, Dollarama’s .offering can generate considerable revenue, even when other retailers may struggle.
In the third quarter of its fiscal 2026, which concluded in October 2025, Dollarama saw a remarkable year-over-year revenue increase of 22.2%. Its adjusted quarterly earnings also rose by 19.4%, signifying robust cost control and improved operating profit margins. The company’s thriving performance enabled it to initiate a share buyback of over $489 million, enhancing shareholder value.
Moreover, Dollarama’s strategic investment in Dollarcity and its entry into the Australian market present significant growth opportunities. The management is also focused on expanding its domestic footprint, aiming to increase the number of locations in Canada to 2,200.
For those who have yet to take advantage of the additional contribution room available in the 2026 TFSA update, now may be the time to consider allocating some funds to Dollarama stock. Given its strong fundamentals and track record, it represents one of the safest long-term investments for TFSA holders.
While the Motley Fool Canada has identified other stocks deemed top contenders for 2026, Dollarama’s resilience and growth potential make it a compelling choice for those looking to bolster their investment portfolios.
