Investing additional money into our TFSA is always an exciting thing, but if you’re like me, you’re finding that this year has been more exciting than ever.
Of course this is due to the fact that many stocks have emerged after the 2018 sell-off that are showing real long-term value.
Here are two stocks that are presenting as very exciting opportunities to put your $6,000 TFSA contribution to good use.
CCL Industries Inc. (TSX: CCL.B)
CCL Industries stock has been hit in the market sell-off, yet the company continues to generate shareholder value and solid growth in a relatively defensive business.
I mean, this $10 billion label and packaging company has grown consistently and profitably over the last ten years, creating shareholder wealth through both capital appreciation and dividend payments.
In fact, the company has grown from revenue of $1.2 billion in 2009 to revenue of $4.8 billion in 2017 for a compound annual growth rate of 18.8%.
And the corresponding increase in free cash flow has been even more impressive. In 2009, the company generated $52.3 million in free cash flow and in 2017, it generated $329 million for a compound annual growth rate 30%.
And in the first nine months of 2018, fundamentals remain strong.
Cash flow from operations increased 4.4%, the company’s cash balance continued to increase, and although the dividend yield is very low, it is but one way that the company is returning cash to shareholders.
CCL stock is down almost 20% from its 2018 highs and in my view, this gives us a perfect opportunity to add it to our TFSA.
With a product assortment that is not particularly economically sensitive, a global manufacturing network, and a strong balance sheet, CCL is well positioned to continue to drive shareholder value.
Nutrien (TSX: NTR)
Formed through the January 2018 merger of PotashCorp and Agrium, Nutrien is a global giant that’s churning out massive amounts of cash flow, ramping up cost savings related to the merger, and benefitting from its diverse, vertically integrated agricultural business.
In turn, shareholders have been and can be expected to continue to benefit in the form of increasing dividend payments and share price appreciation.
Going forward, Nutrien is expecting $600 million in synergies from the combination, which was previously expected to be $500 million. This, along with the sale of large equity investments that are expected to generate up to $4 billion in cash, will serve as catalysts for the stock and for cash flow generation going forward.
With a dividend yield of 3.47%, Nutrien is a good addition to your TFSA.
