2 TSX Treasures to Stash in Your TFSA ASAP!

Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) and one other deeply discounted stock could make you a TFSA millionaire.

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Just when you thought October’s horrific volatility was over, most global indices are “puking out” points as if there’s still something upsetting Mr. Market’s stomach. Nobody knows if he’s still suffering from a mild bout of food poisoning from last month’s Thanksgiving feast or if it’s something much more long lasting and insidious.

At this juncture, the probability of a deep recession is growing more probable by the day. But that doesn’t mean you should dump all your stocks, because there’s still a chance that Mr. Market is just one or two more “vomits” away from feeling better again. He could be feeling right as rain as we head into the holiday season, but there’s no point speculating about it now, as only time will tell what Mr. Market is really suffering from.

As an investor, you shouldn’t try to diagnose what’s wrong with the market. Instead, you should take a bottom-up approach and draw your attention to wonderful businesses that have been unfairly hit due to macro reasons that have little to nothing to do with the company’s ability to thrive over the long haul.

Although the TSX index is only down 8% at the time of writing, there exists a treasure chest of stocks out there that have been slapped with double-digit percentage discounts, and it’s these stocks that could give your TFSA the biggest jolt once Mr. Market inevitably gets better.

Consider Restaurant Brands International (TSX:QSR)(NYSE:QSR) and Industrial Alliance (TSX:IAG) — two quality companies whose stocks are down 13%, and 22%, respectively, from their all-time highs.

Restaurant Brands

If you’re worried about a recession, look no further than Restaurant Brands, a fast-food juggernaut that’s well positioned to grow its robust cash flow stream under any market condition.

The company’s smart management team in 3G Capital is a smooth operator that’s been flooring it when it comes to growth. Restaurant Brands’s ambitious international expansion plan alongside same-store sales growth (SSSG) initiatives will allow the company to reward investors with sustainable, enhanced, risk-adjusted returns throughout the long term.

Given the “inferior” nature of the goods its fast-food chains sell, the company will be able to thrive like few other companies when the going gets tough and the economy begins to contract. The 13% discount, I believe, makes the stock a steal, especially if you think we’re headed for a recession. The stock faces less downside and will allow investors to keep their cool as they collect a generous dividend, which now yields 3.17%.

Industrial Alliance

Industrial Alliance stock isn’t just undervalued; it’s beyond cheap.

The company is selling as if there’s something wrong with its underlying business, and if you were to look at its fairly ugly stock chart, you probably wouldn’t know that the company is riding a long-term tailwind (rising interest rates).

The stock currently trades at an 8.2 forward P/E, a 1.0 P/B, and a 0.5 P/S, all of which are lower than the company’s five-year historical average multiples of 11.6, 1.3, and 0.6, respectively. Moreover, the company is also cheaper than its industry peers, which is just absurd when you consider the company has grown its revenues by 8.6% over the last five years.

You’re getting a diversified insurance company for book value here, and you’ll be collecting a 3.44% dividend yield while you wait for Mr. Market to come to his senses.

Stay hungry. Stay Foolish.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette owns shares of RESTAURANT BRANDS INTERNATIONAL INC. The Motley Fool owns shares of RESTAURANT BRANDS INTERNATIONAL INC.

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