2 TSX Stocks I’d Buy With a Tax Refund

If you have a tax refund coming your way, these two TSX stocks could provide you with stellar long-term income right now.

| More on:

Now to start off, I have to say that I’m self-employed. That’s why these stocks are very much what I would buy. Doubtlessly, it’s pretty much guaranteed I’m going to owe money to the Canada Revenue Agency (CRA). No refund is likely to come my way for some lovely TSX stocks.

But a girl can dream. So that’s why I’m going to discuss the TSX stocks I would buy if a nice dollop of cash was put into my account. If that were to happen, these are the two I’d choose.

Royal Bank of Canada

The Big Six Banks are down right now, which is why it’s the best time to buy. Canadian banks continue to have provisions for loan losses to help them through times like these. They’re also far more diversified than their American counterparts, providing steady and stable revenue streams that can help them rebound after a recession.

Among them, above the rest, I would consider Royal Bank of Canada (TSX:RY) a top choice. It’s the largest of the banks by market capitalization, and that certainly helps. However, it’s also quite lucrative thanks to its wealth and commercial management sectors, as well as its emerging markets investments.

It’s now expanding even more within asset management areas around the world, creating lucrative income to aid in the recession recovery. Yet, right now, shares trade at just 12.3 times earnings, and are down about 6% in the last year alone. With those shares up about 117% in the last decade, it’s a great time to consider the stock for long-term gains.

BCE

Another strong long-term hold would be BCE (TSX:BCE). I’m a big fan of BCE stock as an investment as it remains the largest of the telecommunications companies. However, it also manages to remain ahead of the pack. This is especially true when looking at its wireline business, with the company rolling out 5G quickly. It can now boast the fastest internet speeds in the country.

Yet, BCE stock has more than this one revenue stream. Its media company continues to grow and expand. And infrastructure growth in both fields will allow it to be one of the biggest winners among TSX stocks for some time.

Though, it has to be said, shares aren’t in value territory at 20.2 times earnings. Those shares are also down 13.6% in the last year. Yet, again, once a market recovery is underway, BCE stock is bound to recover quickly as well. That’s what happens when you’re a household name with plenty going for you in the future.

Bottom line

While the biggest doesn’t always mean the best, it certainly does in the case of these TSX stocks. Both offer substantial returns in the long run, and for a good price with shares down right now. Plus, Royal Bank stock offers a dividend yield of 4.02%, whike BCE stock’s is at 6.44%! So if I had a tax refund, I would lock up this steady revenue and fixed income while still on offer.

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 Amy Legate-Wolfe has positions in Royal Bank of Canada. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

woman retiree on computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

This TSX stock has given investors a dividend increase every year for decades.

Read more »

calculate and analyze stock
Dividend Stocks

8.7% Dividend Yield: Is KP Tissue Stock a Good Buy?

This top TSX stock is certainly one to consider for that dividend yield, but is that dividend safe given the…

Read more »

grow money, wealth build
Dividend Stocks

TELUS Stock Has a Nice Yield, But This Dividend Stock Looks Safer

TELUS stock certainly has a shiny dividend, but the dividend stock simply doesn't look as stable as this other high-yielding…

Read more »

profit rises over time
Dividend Stocks

A Dividend Giant I’d Buy Over TD Stock Right Now

TD stock has long been one of the top dividend stocks for investors to consider, but that's simply no longer…

Read more »

analyze data
Dividend Stocks

Top Financial Sector Stocks for Canadian Investors in 2025

From undervalued to powerfully bullish, quite a few financial stocks might be promising prospects for the coming year.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

3 TFSA Red Flags Every Canadian Investor Should Know

Day trading in a TFSA is a red flag. Hold index funds like the Vanguard S&P 500 Index Fund (TSX:VFV)…

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

1 Magnificent Canadian Stock Down 15% to Buy and Hold Forever

Magna stock has had a rough few years, but with shares down 15% in the last year (though it's recently…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

Earn Steady Monthly Income With These 2 Rock-Solid Dividend Stocks

Despite looming economic and geopolitical uncertainties, these two Canadian monthly dividend stocks could help you generate reliable income in 2025…

Read more »