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Where to Put Your $6,000 2020 TFSA Right Now

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With January in the new decade over and 2020 in full swing, it’s an exciting time for investors. Tax-Free Savings Account (TFSA) investors, in particular, might be wondering about what they can do with the additional $6,000 contribution room in their accounts.

You should figure out how you can invest the additional contribution room carefully to make the most of it. A lot of Canadians go with the approach of investing in broad-market ETFs. I would suggest a different approach.

Don’t waste your contribution room trying to own a little bit from every company in the index. Instead, try to find and invest in companies that have the potential to outperform the broader market — between the two approaches, investing in stocks that can perform even slightly better than the general market can help you earn a significantly higher amount of money.

To this end, today I’m going to discuss Telus Corporation (TSX:T)(NYSE:TU) stock and Intact Financial Corporation (TSX:IFC). Both companies offer you a fantastic prospect with respective histories of outperforming the market.

Intact Financial

While I haven’t talked about Intact Financial a lot in the past, it is about time I start. It is the most significant casualty and property insurer in Canada right now. The financial services company also has significant operations in the country south of the border.

IFC is a phenomenal company with consistent performances throughout the years. It relies primarily on its underwriting alone for its income. The gains this company makes due to its expansive investment portfolio adds to its profitability as a business.

Since its IPO in 2005, IFC’s dividend growth has enjoyed a 14-year streak. The company has a massive acquisition potential due to the fragmented insurance market in the country. With assets acquired in the U.S., the company could look to expand further in that country as well.

In the last decade, Intact has a compounded annual growth rate of a remarkable 17.49%. IFC’s stock price has grown by more than 270%.

Telus Corporation

I love talking about Telus. It’s a great business with a history of outperforming the broader market. The telecommunications giant is one of the largest providers in Canada’s telecom industry. Other operators in the sector find it impossible to give Telus a stiff competition.

Telus is a particularly favourite stock for me to consider. The company offers high-quality wireless, internet, landline, and television services. It is experiencing growth in subscribers for all the services it provides. As a result, Telus’ earnings consistently keep growing.

The company has a policy set in place to allow front line staff to make retention decisions. It is the reason why Telus enjoys a healthier workforce with lower turnover rates compared to its competitors. The company circumvents the logistical issues created by handling a media division by not even having one.

Rather than investing resources in creating a challenging division, Telus is paving the way for itself in the healthcare sector. Telus Health is providing technological solutions for Canada’s healthcare industry, opening another door for the company to generate higher revenue.

With a dividend yield of 4.6% and a payout that keeps increasing every year, it’s a fantastic stock to consider.

Foolish takeaway

The Intact Financial stock presents you with a decent option to invest your $6,000 in for its high growth rate over the years. Telus offers you more in terms of stability and high dividends you can leverage.

Allocating the contribution room in your TFSA to shares from both stocks could provide you an ideal long-term strategy to accumulate more wealth.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends INTACT FINANCIAL CORPORATION.

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