You can get an average goods and services tax (GST) return of $299 if your income is below $48,000. Many Canadians just use this extra cash to pay utility bills. But if you can take care of your bills with your taxable income, you can use the GST refund to start your savings. What can you get in $299 in terms of savings? Attention, Canadians! Here are four TSX stocks that you can buy with the $299 GST refund through your Tax-Free Savings Account (TFSA).
Enbridge (TSX:ENB)(NYSE:ENB) is trading around $47, almost recovering to the pre-pandemic levels. This stock is an essential service vital for the economy. Its pipeline infrastructure transmits oil and natural gas to major cities in North America. This infrastructure is only getting more valuable, as governments and environmentalists delay new pipeline approvals over environmental concerns.
Warren Buffett invested in the natural gas pipeline business of Dominion Energy back in July 2020. He had burnt his hands before by selling oil stocks in the market dip only to realize the mistake he’d made. Instead of making a mistake and learning from it, it is less painful to learn from others’ mistakes.
Enbridge is still offering a 7% dividend yield, which means a $3.34 dividend per share for a lifetime. This amount is likely to increase at an average rate of 4-5% in the next 10 years, as the company increases dividends. By calculation, you could get a $5.44 dividend per share by 2031. If you look at 11 years of accumulated dividend, it comes to a little over $47 per share.
Just like Enbridge, SmartCentres REIT (TSX:SRU.UN) is also close to its pre-pandemic level of $32. The REIT fell 33% during the March 2020 drop, as the panic created by the pandemic shut all non-essential retail stores. Being Canada’s largest retail REIT, it dealt with a big blow, as rent collections dropped to alarming levels.
Many other REITs, including its immediate rival RioCan, announced a dividend cut during the pandemic crisis. But SmartCentres benefitted from its large exposure to the essential store Walmart. Its dividend yields have also returned to the average of 6.3%. The stock has surged 27.7% year to date, but this is the recovery surge. Don’t expect the stock to surge more than 5-8% from here.
While dividend stocks have recovered, virus stocks have declined. Lightspeed POS (TSX:LSPD)(NYSE:LSPD) stock is down 17%. This is a dip you do not want to miss. It will begin its rally from June onwards and probably reach $100, representing a 40% upside. That’s $30 per share.
Lightspeed is a seasonal stock, as it serves the retail and hospitality sectors. These sectors are at their seasonal peak during Christmas and seasonal troughs in the first half of the year. This year, Lightspeed will see a recovery of the restaurant segment, which accounts for 52% of its revenue. It acquired some restaurant POS companies last year, such as Upserve. Due to the pandemic-induced lockdown, restaurants didn’t do well. But as things return to normal, it is time for restaurants to open. They might see some pent-up demand.
As social distancing will be here for some time, restaurants will take the help of the Lightspeed platform. The platform offers eCom solutions for restaurants like order ahead, online table booking, and contactless payments. This is a stock you might want to hold onto for another five years, as it works to become a market leader.
Hive Blockchain Technologies (TSXV:HIVE) is a stock in which you can invest about $50. This is a highly speculative stock as it moves alongside the price of Bitcoin and Ethereum. The company mines these cryptocurrencies and stores them in inventory. It earns revenue from transaction fees and by selling crypto. The stock can give you a tax-free exposure to BTC price volatility if you buy through the TFSA.
I should warn you the stock could lose all its gains if the BTC saga comes to an end. But during the upside, it can grow 200-300% in a matter of a few months. So, invest only how much you are willing to lose.