3 Top Financial Stocks for 2019

Looking for top up your RRSP or contribute to your TFSA? Add these three financials stocks, including Toronto-Dominion Bank (TSX:TD)(NYSE:TD), to your portfolio.

| More on:
hand using ATM

Image source: Getty Images

Amid the market carnage, it is tempting to run for the hills. My advice to you: don’t. In fact, investors should take advantage of this great opportunity to pick up quality companies on the cheap. As Warren Buffet once wisely said, “be greedy when others are fearful.”

If you are new to the markets, these types of corrections are normal and healthy. Just like the markets don’t go up forever, so too will they revert up from their recent downtrend. Value investors have been waiting patiently for years for this type of opportunity. Time to take advantage.

With that in mind, here are the best financial stocks for your TFSA and RRSP for 2019.

Canada’s top banking stock

One cannot talk about the top financial stocks in Canada without touching on Canada’s big banks. Of those, my top pick for 2019 is Toronto-Dominion Bank (TSX:TD)(NYSE:TD). TD Bank has been Canada’s best-performing bank for years.

Thanks to the recent downtrend, it is trading at valuations not seen since the financial crisis. Yes, this is a once-in-a-decade opportunity. Canada’s Big Five always revert to trade in line with historical averages; in TD Bank’s case, its average is 12.6 times earnings. This implies 13% upside from today’s share price. The company is also trading at a price-to-earnings-to-growth (PEG) ratio of 0.81. A PEG below one signifies that its share price is not keeping up with expected growth rates and is undervalued.

This is a no-brainer: back the truck up for TD Bank.

Canada’s best-valued stock

If you’re looking for a financial stock that offers the best value, look no further than goeasy (TSX:GSY). The company has lost 40% of its value in the past quarter. There is nothing in the company’s financials or performance that warrants this type of drop.

It continues to post record quarterly results, has met or exceeded guidance since 2011, and has consistently topped analysts’ estimates. Analysts who are calling for earnings and revenue to grow by 54% and 22%, respectively. Trading at a forward P/E of 7.73 and a PEG of 0.27, goeasy is ridiculously cheap.

The company does have a high degree of volatility, but investors will be well rewarded once the market rebounds.

Canada’s best small-cap stock

Is a company that’s a little more obscure more your taste? Then consider Versabank (TSX:VB), Canada’s first fully digital Schedule 1 Chartered Bank. Unlike the other two on this list, Versabank has actually held up quite well. In fact, it posted a 6.91% gain, outperforming the majority of its peers.

Despite this outperformance, it is still cheap. It is trading at a forward P/E of 7.34 and a PEG of 0.60. The bank is expected to grow earnings by 15% on average through 2020. Don’t be turned off by its tiny 0.86% dividend yield. The bank only recently introduced its dividend and last raised dividends by 50% this past November. At this rate, its yield will jump above 2% in no time. Get in Versabank on the ground up.

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 Mat Litalien owns shares of goeasy Ltd, TORONTO-DOMINION BANK, and VersaBank.

More on Dividend Stocks

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »

Payday ringed on a calendar
Dividend Stocks

3 Dividend Stocks That Pay Me More Than $54.57 Per Month

These three dividend stocks have done me well over the years, so let's look at how much I've gotten in…

Read more »

Golden crown on a red velvet background
Dividend Stocks

Dividend Royalty: 3 Fabulous Stocks to Buy Now for Decades of Passive Income

Rogers Communications stock and Canadian Natural Resources stock could pay you dividends for decades to come.

Read more »

Dividend Stocks

The Top Canadian REITs to Buy in April 2024

For growth and dividends this April, look to these two REITs that have quite the promising present as well as…

Read more »