The Motley Fool

TFSA Users: 2 Insanely Cheap Stocks to Load Up on

Image source: Getty Images

Tax-Free Savings Account (TSFA) users shouldn’t stress over the market crash last March. All is not lost, as good names are now trading at insanely cheap prices. You can load up to earn income during the pandemic.

Bear markets are inevitable, although the cause of the present one is extraordinary. COVID-19 is bringing financial ruin that governments, including Canada, had to roll out billions of dollars to support the economy and financial markets.

Meanwhile, TFSA users can own shares of National Bank of Canada (TSX:NA) and Manulife (TSX:MFC)(NYSE:MFC), whose shares have fallen by at least 26% year to date. The dividend yields are up to nearly 7%. You can fill your unused TFSA contribution room for additional tax-free money growth.

Leading bank in Quebec

The sixth-largest bank in Canada is one of the bright investment prospects for income investors. National Bank’s current dividend yield of 5.47% is safe, as this bank isn’t cutting dividends amid the public health emergency. At $52.43 per share, it should be an awesome deal for TFSA investors.

Besides decreasing its prime rate by 0.5%, National Bank is extending valuable assistance to small businesses. This $17.6 billion bank understands the struggles of small business entities, as they cope with the impact of COVID-19.

National Bank provided interest-free loans to about 20,000 small businesses. The $800 million loan program offering began on April 9, 2020. In its recent shareholder meeting, National Bank’s CEO Louis Vachon announced 3,000 moratoriums on repayment of principal for up to six months.

This most dominant bank in Quebec is also relaxing lending standards to affected energy firms. It will enable the companies to cover costs, as the industry rebounds from the abyss.

Insurance fortress

The shares of Manulife have fallen by 38.4% from its 2019 year-end price of $26.07. However, at its current price of $16.01 and a dividend offering of 6.87%, this blue-chip stock is a prize catch. Your $6,000 TFSA annual contribution limit in 2020 will deliver $412.20 in passive income.

Manulife is the largest insurance company in Canada and a well-known brand around the world. This $31.19 billion company offers financial protection and wealth management to clients in Canada, the U.S. (where its brand name is John Hancock), and Asia. The products and services cater to both individuals and groups.

The company has been in existence since 1887. Through the years, Manulife has transformed from a life insurer to a diversified financial services group. The wealth management business, the group insurance segment in Canada, and behavioural insurance products are the growth drivers.

Manulife considers all three as high-potential businesses by 2022. The goal is for these segments to comprise two-thirds of core earnings. The Asian market is also seen to deliver high-octane growth in the 21st century.

This insurance stock is rarely mentioned as a high flyer. Manulife’s is among the very conservative companies. TFSA users invest in the stock for income and growth.

Steady choices

A leading bank in Quebec and an insurance fortress are the bargain buys in the 2020 pandemic. TFSA users have the option to scoop them now before the market recovers.

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

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 Christopher Liew has no position in any of the stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.