Market Rally: Boost Your TFSA With 3 Unjustly-Battered Stocks

The market has started showing signs of recovery, but there are still stocks that may take some time to get up after the slump, presenting easy pickings for your TFSA.

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The S&P/TSX Composite Index is up 28% from its worst slump in March. There is still a long road ahead, but the market has started to rally. Some stocks have already recovered their lost market value, and have restarted their yearly growth journey from where they left off. Some are still recovering, with their share price devaluation reduced to a single digit.

Unfortunately, some stocks took a much harsher beating than others. They need more time to get back up on their feet. It means you still have time to grab these stocks at a deeply discounted price.

A small venture capital company

Small companies may feel the wrath of a market crash more than larger organizations do. One such company is Blackline Safety (TSXV:BLN)(NASDAQ:BL). It’s a small-cap company (current market cap of $207.5 million) that makes safety equipment and detectors for lone workers. Their equipment, communication devices, and gas detectors make up the complete range of products that a company might provide its lone workers to ensure their safe return.

The company has been around since 2004, and it has already been through a recession. Currently, it’s trading at a flat 40% down from its value before the crash, for $4.32 per share. This small venture cap company has an amazing history of growth, and its returns before the crash were almost 233%. So if you want to add a little growth to your TFSA portfolio, this battered growth stock might be worth considering.

An insurance company

The financial sector, along with energy, is weighing down the TSX and keeping it from regaining momentum. Even old, established institutions and dividend aristocrats of the sector, like iA Financial Corporation (TSX:IAG)(NASDAQ:ETFC), are experiencing slow recovery. The company is still trading at about 40% less than it was in early Feb, at a price of $44.2 per share.

iA Financial is one of the largest insurance and wealth management groups in Canada. It has over four million clients and almost $190 billion worth of assets under management. It has increased its payouts consecutively for seven years and has a very stable payout ratio of 27.5%. Currently, it’s offering a 4.6% yield. The company also grew its market value quite steadily before the crash, gaining a 72% altitude in the past five years.

It can offer a nice combination of dividends and growth in your TFSA.

An alternative financial institution

Goeasy (TSX:GSY) rose up as an amazing growth stock. It grew its market value by over 260% in the past five years, and its dividends by 260% as well, from $0.125 per share in 2016 to $0.45 per share in 2020. It, unfortunately, experienced an unjustly deep slump of almost 47%, from its start-of-the-year value, and is currently trading at $37.5 per share. It’s an amazing opportunity for TFSA investors to add a fast-paced growth and dividend stock to their portfolio.

Goeasy makes small personal loans between $500 and $45,000 and has a very high approval rate of about 76%. It has been in business for over 28 years and is considered one of the top fintech companies in the country.

Foolish takeaway

There are a lot of amazing companies that still haven’t been able to rally up with the rest of the TSX. But they are on the path to recovery and will regain their previous momentum eventually. You and your TFSA can take advantage of the slow growth pace, and load up on a nice combination of growth and dividends.

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 owns shares of and recommends BlackLine, Inc. The Motley Fool recommends INTACT FINANCIAL CORPORATION.

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