Canada Revenue Agency has fixed the TFSA (Tax-Free Savings Account) contribution room for 2022 to be $6,000. With the U.S. Federal Reserve announcing a series of interest hikes in the coming years, I expect borrowing costs to rise, thus impacting the profitability of high-growth stocks. So, I believe value stocks to outperform in 2022. Meanwhile, if you are ready to invest, here are three top-value stocks that you need to add to your TFSA account in 2022.
Bank of Nova Scotia
Supported by robust commercial and secured lending loan growth, increased adoption of digital channels, lower provisions for credit losses, and growth in non-interest income, Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) has delivered a strong performance in 2021. Its adjusted EPS grew 46.8% year over year.
Meanwhile, I expect the uptrend in the company’s financials to continue amid rising demand for its services due to economic expansion. Bank of Nova Scotia has significant exposure to commodity-driven markets, which could witness substantial growth in the coming quarters amid economic expansion. Its growth initiatives and cost-cutting measures could also contribute to its financial growth.
Notably, the company also rewards its shareholders by raising its dividends consistently. In November, it had increased its quarterly dividends by 10% to $1 per share, with its forward yield standing at 4.47%. Despite its healthy growth prospects and attractive dividend yield, the company trades at an attractive forward price-to-earnings multiple of 10.8. So, I believe the Bank of Nova Scotia to be an excellent addition to your TFSA account.
goeasy (TSX:GSY) has been one of the consistent performers over the last two decades with its top and bottom lines growing in double digits. Despite its strong performance, the company has acquired less than 3% of its addressable market, providing significant growth potential. With the improvement in economic activities, the company’s loan portfolio has expanded to reach $2 billion earlier this month.
goeasy is improving its omnichannel offerings, venturing into new markets, and adding new business segments to drive growth. With these measures and the recent acquisition of LendCare Holdings, goeasy’s management hopes to increase its loan portfolio to $3 billion by the end of 2023. Despite its healthy growth prospects, the company trades at an attractive forward price-to-earnings multiple of 15.5. It has also boosted its dividends at a CAGR of over 34% for the last seven years, which is encouraging. So, I continue to be bullish on goeasy.
My final pick would be a small-cap Canadian company, Savaria (TSX:SIS), which provides accessibility and mobility solutions, such as wheelchair lifts, stairlifts, and accessible vehicles for home and commercial applications. With the growing aging population and rising income, I expect the demand for the company’s products and services to rise. Meanwhile, the company is working on introducing new innovative solutions to meet the rising needs of its customers.
Additionally, the acquisition of Handicare has strengthened Savaria’s production capabilities, including four manufacturing and assembly plants located in North America, Asia, and Europe. Meanwhile, the acquisition could also improve its efficiency and product designs while diversifying revenue sources and providing cross-selling opportunities. The company also pays monthly dividends, with its forward yield at 2.56%. So, its high-growth potential, monthly dividends, and an attractive forward price-to-earnings multiple of 22.1, make Savaria an attractive buy.