It’s not smart to put off important decisions and tasks until the last minute. Avoiding procrastinating is just as important for investing as it is for other endeavours in life.
If you wait too long for a compelling stock to drop down to the price/value you consider just right, you may lose a lot of precious time and growth opportunities associated with it. It’s essential to time the market, but you should also learn the importance of timing.
On that note, if you still need to utilize your TFSA contribution room (this year’s or carryover from the past), there are three stocks you may consider for the job.
An asset management company
Brookfield Asset Management (TSX:BAM.A) is one of the largest asset-management companies in Canada and has assets in five major categories in over 30 countries in the world. The total assets under ,anagement (AUM) are worth over $750 billion.
The asset classes it invests in include critical infrastructure, renewables, and real estate, in which it’s expected to make significant additions leveraging the distressed Chinese market.
The company is a good investment for more than its stable business model and extensive reach. BAM.A stock has rewarded its investors with both dividends and growth for a long time and has proven its mettle in distressed markets as well, assuming its investors stuck around for long enough.
An example would be the great recession, when the stock fell over 54% but got back on track, though it took around three years.
A bank
National Bank of Canada (TSX: NA), the smallest of the largest Canadian banks, has a solid regional presence, though it lags behind the others when it comes to a presence in the international market. However, it’s one of the top choices among the big six bank stocks if you consider its collective (dividend and capital appreciation) return potential, at least in the last decade.
NA stock returned over 270% to its investors in the last 10 years and is currently offering a modestly high yield of 4.1%, though you can lock in a significantly better number by buying it in a bear market.
Its growth, apart from being better than most in the banking sector in Canada, has also been relatively steady. Though the upward progress hit a bump due to the pandemic, it may revert to its former bullish momentum when the market becomes healthy.
A gold stock
Few gold stocks offer decent long-term growth potential. They may rise when the market is weak, and there is a high demand for gold but then get in a rut when the market is strong again. However, Franco Nevada (TSX: FNV) has been a decent growth stock in the last 15 years.
Since 2007, the stock has risen roughly 1,200%. And even though the road up has yet to be steady, if it performs even half as well in the future (40% a year growth equivalent, instead of 80%), you may see your capital double within three years.
It’s also a well-established dividend aristocrat that has grown its payouts for over 14 consecutive years.
Foolish takeaway
None of the three can currently be classified as “undervalued stocks.” But their long-term growth potential is decent enough that if you hold them for a long time in your TFSA, you may experience decent growth, even if you can’t snatch up a bargain. All three are dividend payers, so if you are buying them purely for growth, you may consider opting for the DRIP reinvestment option to enhance your long-term return potential.
