Got $6,000? Here’s How You Can Power Your TFSA Portfolio in August

Canadian investors debating over where to spend their $6,000 TFSA room should look to stocks like Bank of Nova Scotia (TSX:BNS)(NYSE:BNS).

| More on:

Image source: Getty Images

In 2019, the ruling federal Liberals announced that the annual contribution limit in a Tax-Free Savings Account (TFSA) would increase from $5,500 to $6,000. It has remained at that annual limit through 2022. Meanwhile, the cumulative contribution room in a TFSA now sits at a whopping $81,500. This applies to investors who have been eligible for contributions since its inception in January 2009. Today, I want to look at TSX stocks that have the capability to power your TFSA in August and beyond in 2022. Let’s jump in.

Why you should spend $2,000 on this stock in your TFSA today

There are several strategies investors can pursue in their TFSA. Scotiabank (TSX:BNS)(NYSE:BNS) and other top bank stocks are perfect for Canadians who are committed to a balanced investment strategy. That means we seek to pursue a mix of capital growth and income. Share of this bank stock have dropped 13% in 2022 as of close on August 8. That has pushed the stock into negative territory in the year-over-year period.

Investors can expect to see Scotiabank’s third-quarter 2022 earnings before markets open on August 23. In the first half of fiscal 2022, the bank reported adjusted net income of $5.52 billion, or $4.33 per diluted share — up from $4.89 billion, or $3.78 per diluted share, in the first half of fiscal 2021.

This bank stock currently possesses a favourable price-to-earnings (P/E) ratio of 9.4. Better yet, Scotiabank offers a quarterly dividend of $1.03 per share. That represents a strong 5.2% yield. This stock is perfect for a TFSA portfolio in the long term.

Here’s another balanced stock to target right now

Inflation in Canada has surged to levels not seen in 40 years in 2022. One of the key drivers has been rising food prices. That has included price increases at top Canadian restaurants. Investors may want to snatch up Restaurant Brands International (TSX:QSR)(NYSE:QSR) in their TFSA in this environment. Its shares have climbed 1.9% in 2022 at the time of this writing.

The company released its second-quarter fiscal 2022 results on August 4. It posted system-wide sales growth of 14% year over year to $10.0 billion. Meanwhile, it reported total revenues of $1.63 billion — up from $1.43 billion in the previous year. Moreover, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose to $618 million compared to $577 million in the second quarter of fiscal 2021.

Shares of RBI are trading in favourable value territory compared to its industry peers at the time of this writing. It offers a quarterly dividend of $0.54 per share. That represents a 3.6% yield.

One more stock that can round out your TFSA portfolio in the second half of 2022

TFSA investors should also be eager to get in on the burgeoning green energy space. Capital Power (TSX:CPX) is an Edmonton-based company that develops, acquires, owns, and operates renewable and thermal power-generation facilities in North America. This stock has climbed 27% in 2022 as of close on August 8.

Capital Power unveiled second-quarter 2022 earnings on August 2. Revenues and other income in the year-to-date period rose to $1.21 billion — up from $941 million in the first six months of 2021. Meanwhile, adjusted EBITDA rose to $667 million compared to $544 million in the prior year.

This stock possesses a solid P/E ratio of 45 relative to its industry peers. It last paid out a quarterly dividend of $0.58 per share. That represents a 4.6% yield. This is another top stock that can provide strong capital growth and income for the long haul.

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 BANK OF NOVA SCOTIA and Restaurant Brands International Inc.

More on Investing

A colourful firework display
Bank Stocks

The Next Canadian Stock I’m Going to Buy

Want to close out the year with a big bang? A Big Bank is highly recommended if you’re looking for…

Read more »

a Couche Tard store
Top TSX Stocks

Why Alimentation Couche-Tard Stock Fell 5% in September

Couche-Tard stock took a hit in September, but the downside pressure could be short-lived considering its commitment to innovation and…

Read more »

Canadian energy stocks are rising with oil prices
Energy Stocks

Why Suncor Energy Stock Fell 10% in September

Energy stocks are top gainers on the TSX in 2022, but still cheap. Suncor Energy stock seems ripe for a…

Read more »

Energy Stocks

Why Canadian Natural Resources Fell 10% in September

With healthy growth prospects and dividend growth, Canadian Natural Resources would be an ideal buy at today's attractive valuation for…

Read more »

A stock price graph showing declines
Tech Stocks

Why Tesla Stock Dived Over 8% Today

Here’s the key reason why TSLA stock is being hammered Monday, despite reporting record Q3 2022 car deliveries and production…

Read more »

Dividend Stocks

3 Expensive TSX Stocks I’d Buy if They Took a Dip

Three relatively expensive large-cap stocks are on my buy list if their prices dip in the next market correction.

Read more »

An airplane on a runway

5 Things to Know About Air Canada Stock

Air Canada stock looks like one of the cheapest on the market. But before you buy the airliner, here are…

Read more »

funds, money, nest egg
Stocks for Beginners

No Time to Invest? The Easiest Way to Create a Million-Dollar TFSA

Here’s how investors can take advantage of a recent market crash to create a million-dollar TFSA with ease.

Read more »