The Best TSX Stocks to Add to Your TFSA Today

Canadians should look to add TSX stocks like Northland Power (TSX:NPI) to their TFSA as volatility picks up.

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Experts and analysts are starting to sound warnings when it pertains to the broader stock market. North American indexes showed signs of increased volatility throughout the month of May. We also saw turbulence hit the cryptocurrency space. Today, I want to look at TSX stocks that will provide some cover in your Tax-Free Savings Account (TFSA) as we look ahead to the summer. Let’s dive in.

TFSA investors should target this top telecom

Rogers Communications (TSX:RCI.B)(NYSE:RCI) is one of the largest telecommunications companies in Canada. Its shares have climbed 2.5% in 2021 as of mid-afternoon trading on May 27. The TSX stock is up 8.1% from the prior year.

The company released its first-quarter 2021 results on April 21. Total revenue grew 2% from the prior year to $3.48 billion. Meanwhile, adjusted EBITDA climbed 4% to $1.39 billion. Like its peers, Rogers has committed to 5G development in Canada. It announced the largest such agreement that includes a $300 million investment to upgrade or build more than 600 wireless towers by the end of 2025. It has been ranked the most reliable 5G network by umlaut.

Shares of this TSX stock possess a solid price-to-earnings ratio of 19. TFSA investors can also count on its quarterly dividend of $0.50 per share. That represents a 3.2% yield.

A TSX stock that has thrived in the face of the pandemic

The TSX suffered a sharp pullback when the seriousness of the pandemic became apparent to all in March 2020. At the time, I’d suggested that investors bet on grocery retail stocks. Metro (TSX:MRU) is a Montreal-based grocery retailer. Shares of this TSX stock have increased 1.6% in 2021. Its shares are up 5% from the prior year.

TFSA investors on the hunt for a defensive option should look to Metro. The company unveiled its Q2 2021 results on April 21. Food same-store sales climbed 5.5% from the prior year. Adjusted net earnings increased 6.5% to $194 million.

Shares of Metro last had a favourable P/E ratio of 17. Metro currently offers a quarterly dividend of $0.25 per share, which represents a modest 1.7% yield.

One more TSX stock to trust in this climate

At the beginning of 2021, I’d discussed why investors should seek exposure to the green energy space. These TSX stocks can provide the potential for growth and solid income in your TFSA. Northland Power (TSX:NPI) is an Ontario-based independent power producer. It develops, builds, owns and operates clean and green power projects around the world. Shares of Northland are down 9.4% in 2021. The TSX stock is still up 36% from the prior year.

Northland Power saw earnings dip in Q1 2021 compared to the prior year. This was largely due to offshore wind above historical norms in the first quarter of 2020. The company is still on track for strong earnings growth in the quarters ahead. TFSA investors can also count on its quarterly dividend of $0.10 per share. This represents a 2.9% yield.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends ROGERS COMMUNICATIONS INC. CL B NV.

More on Investing


1 Top Value Stock to Buy After a Market Pullback

Alimentation Couche-Tard (TSX:ATD) is a wonderful retail stock that's just too cheap to ignore after the recent TSX market pullback.

Read more »

Coworkers standing near a wall
Bank Stocks

Policy Rate: 2 More Hikes After July 2022 to Reach Neutral Level

The Bank of Canada might need three more rate hikes beginning in July 2022 to reach neutral levels.

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

3 Undervalued Dividend Stocks to Buy Right Now

Dividend-paying stocks such as Bank of Montreal offers investors the opportunity to generate outsized gains in the next year.

Read more »

edit Sale sign, value, discount

Cheap Stocks to Buy: 2 Unbelievable Deals in This Environment

While there are plenty of cheap stocks to buy in this environment, these two undoubtedly offer some of the best…

Read more »

Arrow descending on a graph
Tech Stocks

2 Industries That Saw the Worst Decline Last Month

The TSX has been declining at a sharp angle since the beginning of June. And two industries (crypto and cannabis)…

Read more »

Businessperson's Hand Putting Coin In Piggybank
Dividend Stocks

RRSP Dividend Investors: 2 Top Oversold TSX Stocks to Buy for Total Returns

RRSP investors can pick up top TSX dividend stocks at cheap prices today and get a shot at some attractive…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

1 Canadian Growth Stock That Could Double Your Money in an Economic Recovery

The market downturn is an opportunity to lock growth during the economic recovery. This stock is a blend of value,…

Read more »

Bank sign on traditional europe building facade

RRSP Investors: Here’s the Best Canadian Bank Stock for Your Buck

Bank of Montreal (TSX:BMO)(NYSE:BMO) stock is getting far too cheap to ignore after the latest spill in the big Canadian…

Read more »