The S&P/TSX Composite Index moved up marginally on Thursday, May 19 after suffering a sharp triple-digit loss in the previous trading session. Investors should look back to the March 2020 market pullback that sprung out of the beginnings of the COVID-19 pandemic. That provided fantastic buying opportunities across the board that made new fortunes. Now, in 2022, the Tax-Free Savings Account (TFSA) boasts more cumulative contribution room. This is the perfect time to take advantage and snatch up cheap TSX stocks in your TFSA!
TFSA investors should snatch up undervalued bank stocks in this climate
TD Bank (TSX: TD)(NYSE: TD) is one of the top TSX stocks I’d look to snatch up in a TFSA right now. It is the second-largest Canadian bank by market cap. Shares of TD Bank have dropped 7.6% in 2022 as of close on May 19. The stock is still up 4.4% from the previous year. These profit machines have provided a great balance of capital growth and income over the past decade. I’m betting it will deliver again over the next 10 years.
The bank is set to release its second-quarter 2022 earnings on May 26. In Q1 2022, the bank reported adjusted net income of $3.83 billion or $2.08 per share — up from $3.38 billion, or $1.83 per share, in the previous year. TD Bank benefited from a big drop in provisions set aside for credit losses and its Retail Banking segments performed well in Canada and the United States.
Shares of TD Bank possess a favourable price-to-earnings (P/E) ratio of 11. It offers a quarterly dividend of $0.89 per share, which represents a 3.8% yield.
Here’s a top TSX stock that looks undervalued in this market pullback
TFSA investors should also look to snatch up Sun Life Financial (TSX: SLF)(NYSE: SLF) in the second half of May. This top TSX stock has declined 12% in the year-to-date period. That has pushed its shares into negative territory compared to the same time in 2021.
This Toronto-based company is one of the top insurance providers and financial services companies in Canada. It released its first-quarter 2022 results on May 11. Insurance sales increased 9% year over year to $799 million in Q1 2022.
Shares of this TSX stock last had an attractive P/E ratio of 9.5. TFSA investors can also count on its quarterly dividend of $0.69 per share. That represents a solid 4.4% yield.
One more undervalued TSX stock to stash in your TFSA today
Gold prices have retreated after reaching above US$2,000/ounce earlier this year. However, it is still a good idea to stash gold equities as a hedge in your TFSA going forward. Barrick Gold (TSX: ABX)(NYSE: GOLD) is one of the top gold producers on the planet. This TSX stock has climbed 11% so far this year. It is still down 11% from the same period in 2021.
Barrick Gold had a strong start in the first quarter of 2022 on the back of improved year-over-year spot gold prices. Shares of this TSX stock possess a favourable P/E ratio of 19. It offers a quarterly dividend of $0.10 per share, representing a modest 1.9% yield.
