Now’s the Time to Load up on Your TFSA With These 3 Enticing Stocks

If you still have contribution room left in your TFSA and are looking for good picks, plenty of discounted stocks have just begun their recovery journey.

| More on:

Image source: Getty Images

Do you still have contribution room left in your TFSA? It may be this year’s or carried forward from the former years. But if you have the contribution room and some capital, you may consider investing in good companies whose stocks are still discounted.

You may achieve decent gains from the current recovery that’s underway if you buy any of the discounted stocks in this recovering market. But there are three stocks worth considering keeping in your TFSA long term, well beyond the current recovery phase is over.

A financial stock

CI Financial (TSX:CIX) is a global asset/wealth management company with a decent international presence though its business is concentrated in North America. It has five business divisions under its banner, including private wealth and direct investing. The company has $334 billion worth of assets under management (AUM), and its financials are pretty stable.

From an investment perspective, CI Financial is an excellent pick for two reasons – dividends and recovery potential. It’s trading at a 46% discount from its 2021 peak, pushing the yield to an attractive level of 4.4%. And the same discount augments its recovery-fueled growth potential.

At its current value, the stock can double your capital by going just a little beyond its former peak. You may not have to wait long for this undervalued stock to reach its intrinsic value.

A fuel cell company

There are various ways to invest in the future of green energy and transport, and the fuel cell is one of them. By investing in a company like Ballard Power Systems (TSX:BLDP)(NASDAQ:BLDP), one of the most prominent hydrogen fuel cell companies in the world, you get exposure to a wide array of green technologies. N

That’s because these cells are used to power small and large vehicles and offer backup or primary power solutions to various industries.

The timeline is the only problem with investing in technology like Ballard’s fuel cells. Hydrogen supply chains are still nascent and are even farther behind than EVs in market penetration. But its scope is much broader.

Ballard was one of the stocks that experienced robust post-pandemic growth and a brutal correction. It’s still down 77% from its 2021 peak and 34% from its pre-pandemic peak, but it has started to recover. At this discounted price, it may be a compelling long-term hold.

A learning technology company

Learning Management Suites (LMS) gained popularity during the pandemic as the world saw its potential firsthand. Docebo (TSX:DCBO)(NASDAQ:DCBO), an AI-powered learning suite that caters to businesses (not individual consumers), managed to ride this popularity wave. Its stock rose over 700% between Oct 2019 and Sep 2021.

The post-pandemic growth was too rapid, and the stock, along with the rest of the tech sector is going through a more volatile phase, but has entered into a correction mode. Although the stock is still 57% down from its 2021 peak.

Now that the tech sector and TSX (as a whole) are recovering, Docebo stock is also going up. It has already risen 44% since mid-June. The stock is worth holding for both its current recovery potential and long-term growth potential.

Foolish takeaway

For novice investors who have yet to fully understand what a TFSA is and why it might be the right registered account for these discounted stocks, it’s essential to learn the subtle differences between the TFSA and RRSP.

Since it has a smaller contribution room, a TFSA portfolio may require an additional push from more powerful growth stocks to match or grow closer to your RRSP nest egg goal, assuming you utilize the full contribution room of both accounts.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Docebo Inc.

More on Dividend Stocks

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

This 8% Dividend Stock Pays Cash Every Month

Earn monthly cash of $154 with this 8% dividend stock.

Read more »

oil tank at night
Dividend Stocks

Think Oil Is Going Higher? 3 Dividend Stocks to Buy Now

Looking for steady dividend growth? These three Canadian oil stocks could provide substantial dividend income in the coming years.

Read more »

Profit dial turned up to maximum
Dividend Stocks

This 7% Dividend Stock on the TSX is Worth Watching

With this superb TSX stock now trading at the bottom of its 52-week range, it's certainly a dividend stock you'll…

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

2 TSX Dividend Stocks to Buy While They Still Offer Great Yields

These top dividend-growth stocks now offer 7% dividend yields.

Read more »

Dots over the earth connecting the world
Dividend Stocks

1 Magnificent Dividend Stock Down 23% to Buy Right Now Near a Once-in-a-Decade Valuation

Patient investors could be happy with this dividend stock a few years down the road.

Read more »

Human Hand Placing A Coin On Increasing Coin Stacks In Front Of House
Dividend Stocks

Best Stocks to Buy in May 2024: TSX Real Estate Sector

Besides yielding stable monthly passive income, these top TSX real estate stocks could help you earn high returns on your…

Read more »

exchange-traded funds
Dividend Stocks

These 2 Dividend ETFs Are a Retiree’s Best Friend

Retirees looking for steady income will love these two Canadian dividend ETFs

Read more »

Bad apple with good apples
Dividend Stocks

Safe and Sound Stocks for Canadians: My Top 5 Choices

Want some of the best stocks for Canadians right now? Here's my top 5 list of stocks to buy today…

Read more »