The Best Stocks to Buy for Your RRSP in March 2025

ByDan Kent Published On:

Key takeaways

Stability and Growth Are Key: RRSPs thrive on a mix of stable dividend-paying stocks like Fortis and growth-driven leaders like Microsoft, offering long-term wealth-building opportunities.

Diversification Enhances Security: Including stocks across various sectors—such as infrastructure, technology, healthcare, and consumer goods—helps reduce risk and ensures steady returns for retirement planning.

Tax Advantages Amplify Compounding: The tax-deferred growth of RRSPs makes them ideal for holding dividend payers and compounding investments, maximizing the benefits of long-term holdings like Canadian National Railway and Johnson & Johnson.

3 stocks I like better than the ones on this list.

The Registered Retirement Savings Plan (RRSP) stands out as an essential tool that Canadian investors rely on to accumulate wealth leading up to retirement.

Not only do these accounts let you accumulate tax-free earnings until withdrawn, but they allow you to take advantage of contributions made during your highest years of taxation to get money back come tax time.

US stocks inside of an RRSP

For many Canadians, the question that is consistently brought up is what stocks should they hold in their RRSP? For tax purposes, if you want to add US stocks to your portfolio, the RRSP is often the best place to do so.

If you own US stocks inside your RRSP, the IRS will not apply a withholding tax to the dividends received inside them. However, shareholders will still be charged if you hold them in a tax-sheltered account like the Tax-Free Savings Account (TFSA).

This makes US dividend-paying stocks a perfect candidate for your RRSP and is where I invest most of my own RRSP contribution room. If I don’t have room in my RRSP or TFSA, I often buy them in my non-registered account. Yes, I still pay tax on the capital gains and dividends, but I can also get a foreign tax credit, which is tax-deductible, on the dividends paid.

In terms of Canadian stocks that pay dividends, you could qualify for the dividend tax credit if they’re eligible for dividends. For this reason, I’m not only going to go over three top Canadian stocks to add to your RRSP, but I’ll cover three US stocks as well to give some variety to this post.

Keep in mind that the RRSP is an account that can have a wide variety of investing strategies. For the purposes of this post, I’m going to stick to blue-chip Canadian and US holdings. 

If you’d like to divert to a more growth-based, income-based, or any other investment strategy, just ultimately do what works for you.

What are the best stocks for an RRSP right now?

Leading North American freight railway

Canadian National Railway (TSE:CNR)

Canadian National Railway operates an extensive freight rail network across Canada and the U.S., transporting goods such as grains, chemicals, automotive products, and intermodal containers. With a history dating back to 1919, the company plays a critical role in North American trade and is known for its operational efficiency.

P/E: 17.9

5 Yr Revenue Growth: 3.3%

5 Yr Earnings Growth: 7.8%

5 Yr Dividend Growth: 11.7%

Yield: 2.2%

  • Critical infrastructure for North American trade, benefiting from diverse cargo shipments.
  • Proven track record of steady revenue growth and profitability.
  • Strong operating margins, bolstered by cost management and efficiency initiatives.
  • Defensive business model resilient during economic downturns.
  • Attractive dividend yield with consistent dividend growth over decades.
  • Long-term growth driven by increasing intermodal traffic and international trade.
  • Trade Volume Growth: Rising exports and imports in Canada and the U.S. drive demand for CN’s rail services.
  • Economic Sensitivity: CN’s performance closely follows economic activity, making GDP growth a key factor.
  • Automation & Technology: Investments in rail technology improve efficiency and reduce costs.
  • Sustainability Goals: CN is positioning itself as a low-carbon transport option, which appeals to ESG-focused investors.
  • Regulatory Oversight: Railways face heavy regulation, which can impact operations and profitability.
  • Economic Slowdowns: A significant drop in economic activity could reduce shipping volumes.
  • Competition from Trucks: Advances in trucking could erode CN’s competitive edge.
  • Labor Disruptions: Strikes or labor disputes can disrupt operations and hurt financial performance.

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Regulated utility with steady cash flow

Fortis (TSE:FTS)

Fortis is a leading utility company providing electricity and natural gas services to customers in Canada, the U.S., and the Caribbean. With over 99% of its revenue from regulated operations, Fortis is known for its stability and strong dividend record, making it a favorite among conservative investors.

P/E: 18.8

5 Yr Revenue Growth: 6.5%

5 Yr Earnings Growth: 3.7%

5 Yr Dividend Growth: 5.8%

Yield: 3.9%

  • Predictable revenue streams from regulated utility operations.
  • 50 years of consecutive dividend increases, appealing to income-focused investors.
  • Long-term growth driven by investments in renewable energy and grid modernization.
  • Defensive business model makes it resilient during economic downturns.
  • Geographic diversification provides exposure to different regulatory markets.
  • Strong capital investment plan ($25 billion through 2028) supports future growth.
  • Transition to Renewables: Fortis is investing heavily in clean energy and grid upgrades to align with climate goals.
  • Interest Rate Movements: As a capital-intensive business, rising interest rates can impact Fortis’ borrowing costs.
  • Regulatory Environment: Changes in regulations could affect allowed returns and investment timelines.
  • Population Growth: Expanding customer bases in the U.S. and Canada drive incremental demand for utilities.
  • Interest Rate Sensitivity: Higher rates can increase borrowing costs and pressure margins.
  • Regulatory Risk: Adverse regulatory decisions could limit Fortis’ ability to recover costs or earn profits.
  • Slow Growth: As a utility, Fortis offers limited upside in rapidly growing economic environments.
  • Climate Impact: Extreme weather events could increase costs and disrupt operations.

Global convenience store leader

Alimentation Couche-Tard (TSE:ATD)

Alimentation Couche-Tard operates a network of over 14,000 convenience stores and fuel stations across North America, Europe, and Asia. Known for its Circle K brand, the company is a leader in the convenience retail industry, offering snacks, beverages, and fuel.

P/E: 20.6

5 Yr Revenue Growth: 3.7%

5 Yr Earnings Growth: 12.3%

5 Yr Dividend Growth: 24.2%

Yield: 1.0%

  • Global scale with a strong footprint in North America and Europe.
  • Proven track record of profitable acquisitions driving growth.
  • Strong free cash flow generation supports further expansion and shareholder returns.
  • Resilient business model with consistent demand for convenience retail.
  • Opportunities in foodservice and EV charging add new growth avenues.
  • Focus on operational efficiency and cost management improves profitability.
  • EV Transition: As electric vehicles become more popular, Couche-Tard’s push into EV charging is critical.
  • M&A Activity: Future acquisitions will play a significant role in the company’s growth strategy.
  • Foodservice Expansion: Diversifying beyond fuel and snacks helps drive higher-margin sales.
  • Consumer Behavior: Shifts toward healthier and on-the-go food options shape Couche-Tard’s product offerings.
  • Fuel Dependency: A decline in fuel sales due to EV adoption could hurt revenue.
  • Acquisition Integration: Challenges in integrating new businesses could slow growth.
  • Foreign Exchange Exposure: Global operations expose the company to currency fluctuations.
  • Competitive Pressure: Rising competition from other retailers and online delivery services could erode market share.

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Global leader in defense and aerospace

Lockheed Martin (LMT)

Lockheed Martin is a U.S.-based defense contractor specializing in advanced technologies, including fighter jets (F-35), missile systems, and space exploration. The company serves governments worldwide, with the U.S. Department of Defense being its largest customer.

P/E: 18.0

5 Yr Revenue Growth: 4.7%

5 Yr Earnings Growth: 9.4%

5 Yr Dividend Growth: 8.2%

Yield: 2.6%

  • Industry leader in defense and aerospace with strong contract visibility.
  • Increasing defense budgets worldwide provide a long-term tailwind.
  • Stable cash flows support consistent dividends and share buybacks.
  • Significant R&D investments in space exploration and hypersonic weapons.
  • High barriers to entry protect its dominant market position.
  • Geopolitical tensions create sustained demand for advanced defense systems.
  • Global Defense Spending: Rising budgets worldwide provide long-term demand for Lockheed’s products.
  • Space Innovation: Investments in satellite and space exploration create new growth opportunities.
  • Geopolitical Tensions: Ongoing conflicts and competition drive demand for defense systems.
  • Technology Leadership: Lockheed’s innovation in hypersonic weapons and AI enhances its competitive edge.
  • Customer Dependency: Heavy reliance on U.S. government contracts poses concentration risk.
  • Budget Cuts: Any reduction in defense spending could impact revenues.
  • Supply Chain Disruptions: Issues in sourcing parts can delay projects and raise costs.
  • Geopolitical Risk: The company’s operations and sales could be impacted by changing international relations.

Global leader in healthcare and consumer goods

Johnson & Johnson (JNJ)

Johnson & Johnson is a multinational healthcare company offering pharmaceuticals, medical devices, and consumer health products. Its diverse portfolio includes household names like Tylenol and Band-Aid, as well as lifesaving medications and cutting-edge medical technologies.

P/E: 25.4

5 Yr Revenue Growth: 1.6%

5 Yr Earnings Growth: 0.6%

5 Yr Dividend Growth: 5.5%

Yield: 3.3%

  • Diversified revenue streams across pharmaceuticals, devices, and consumer products.
  • Strong dividend history with over 60 years of consecutive increases.
  • Leading position in critical markets like oncology, immunology, and medical devices.
  • Resilient business model that performs well in various economic conditions.
  • Robust R&D pipeline supports future growth in high-margin pharmaceutical products.
  • Upcoming spin-off of consumer health business could unlock shareholder value.
  • Pharmaceutical Growth: Blockbuster drugs and a strong pipeline drive long-term revenue.
  • Consumer Health Spin-Off: The separation of its consumer business will create two focused entities.
  • Aging Populations: Growing demand for medical devices and treatments benefits J&J.
  • Global Expansion: Increasing presence in emerging markets drives incremental growth.
  • Litigation: Legal risks related to product liability and patents remain a concern.
  • Patent Expirations: Loss of exclusivity on key drugs could impact revenue.
  • Regulatory Pressure: Stricter healthcare regulations may increase costs and reduce margins.
  • Economic Sensitivity: Demand for consumer health products may dip in economic downturns.

Tech giant and cloud computing leader

Microsoft (MSFT)

Microsoft is one of the world’s largest technology companies, offering software, hardware, and cloud services. Its flagship products include Windows, Office 365, Azure cloud services, and Xbox gaming consoles. Microsoft has successfully transitioned into a cloud-first business model, driving consistent growth and profitability.

P/E: 36.6

5 Yr Revenue Growth: 14.3%

5 Yr Earnings Growth: 18.5%

5 Yr Dividend Growth: 10.2%

Yield: 0.7%

  • Dominant position in cloud computing with Azure capturing a growing market share.
  • Recurring revenue streams from Office 365 and subscription-based services.
  • Strong cash flow generation supports dividends and stock buybacks.
  • Significant investments in AI and advanced technologies fuel future growth.
  • Diversified business model spanning software, gaming, and enterprise services.
  • Long-term growth tailwinds from digital transformation and remote work trends.
  • Cloud Computing Growth: Azure continues to be a key growth driver as enterprises migrate to the cloud.
  • AI Integration: Investments in AI and machine learning enhance Microsoft’s product offerings.
  • Subscription Revenue Growth: Continued adoption of Office 365 and Teams boosts recurring revenue.
  • Gaming Expansion: Growth in Xbox and cloud gaming positions Microsoft as a leader in the gaming industry.
  • Regulatory Scrutiny: Antitrust concerns in both the U.S. and Europe could impact business operations.
  • Competition: Fierce competition from other tech giants, especially in cloud services.
  • Economic Cycles: Slowdowns in corporate spending could impact software and cloud revenue.
  • Cybersecurity Threats: Increased exposure to cyberattacks could harm reputation and financials.

What about an exchange-traded fund?

If you’re looking to buy an exchange-traded fund (ETF) for your RRSP, there are a multitude of options you could consider. Exchange-traded funds offer lower fees than traditional mutual funds and are a very popular option among Canadian investors.

I won’t go over too many of the ETFs inside of this article. Instead, I’ll just give you some links to other research we’ve done on ETFs that you could consider for your RRSP.

If you’re looking for US exposure, we have a great article on the best S&P 500 ETFs.

Check out this post if you’re looking for some of the top Canadian dividend stocks in an ETF.

Or maybe you’re looking to diversify away from strictly dividend income and add some fixed income to your portfolio? In that case, you could look at this article on the top Canadian bond ETFs.

Finally, maybe you’re looking to buy a real estate investment trust. In that case, look to this article on the top REIT ETFs.

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