The annual contribution room for the Tax-Free Savings Account (TFSA) was reduced to $5,500 in 2016 from the $10,000 that it had ballooned to in the final year of the Stephen Harper government. Fortunately, the annual limit has steadily increased under the Trudeau-led Liberals. Last year, the government announced that the annual contribution limit would rise to $6,500 in 2023. That means that the cumulative contribution room in a TFSA now sits at $88,000.
Today, I want to look at three stocks that are worth spending a portion of your 2023 contribution on. Let’s dive in.
Here’s why I’m looking to stash this cybersecurity stock in my TFSA
Absolute Software (TSX: ABST) is a Vancouver-based company that develops, markets, and provides software services that support the management and security of computing devices, applications, data, and networks for various organizations. Shares of this tech stock have plunged 25% in 2023 as of close on April 11. The stock is still up 7.5% in the year-over-year period.
TFSA investors should be eager to get in on the burgeoning cybersecurity space. Fortune Business Insights recently estimated that the global cybersecurity market was valued at US$139 billion in 2021. The same report projected that this market would rise to US$376 billion by 2029. That would represent a compound annual growth rate (CAGR) of 13% over the forecast period from 2022 to 2029.
In the second quarter (Q2) of fiscal 2023, Absolute delivered revenue growth of 17% to $57.2 million. Meanwhile, total revenue increased 19% in the first half of the fiscal year to $110 million. This tech stock is trading in favourable value territory compared to its industry peers at the time of this writing. It also offers a quarterly dividend of $0.08 per share. That represents a 2.9% yield.
This stock offers a shot at growth and income going forward
Badger Infrastructure (TSX: BDGI) is another stock I’m excited about in 2023 and beyond. This Calgary-based company provides non-destructive excavating and related services in Canada and the United States. Its shares have climbed 13% in 2023 as of close on April 11. The stock is down marginally year over year. This is a stock I’m looking to buy on its slight dip for a TFSA.
The company released its Q4 and full-year fiscal 2022 earnings on March 23, 2023. It delivered revenue growth of 25% for the full year to $570 million. EBITDA stands for earnings before interest, taxes, depreciation, and amortization, which looks to give a more accurate picture of a company’s profitability. Badger posted adjusted EBITDA growth of 17% in fiscal 2022.
This stock last had a price-to-earnings ratio of 42, which still puts Badger in better value territory than the industry average. Moreover, it offers a quarterly dividend of $0.172 per share, which represents a 2.2% yield.
One more exciting stock that could deliver big in your TFSA
WELL Health (TSX: WELL) is the third and final stock I’d look to snatch up for our TFSA today. This Vancouver-based digital health company operates in North America and around the world. Its shares have shot up 74% in the year-to-date period.
TFSA investors should seek exposure to companies that are engaged in the telehealth space. WELL Health unveiled its final batch of fiscal 2022 results on March 21, 2023. For the full year, the company achieved record annual revenue of $569 million — up 88% compared to the previous year. Meanwhile, adjusted EBITDA soared 73% to a record $104 million.
This stock is still trading in attractive value territory in the middle of April. WELL Health is on track for super growth in one of the most exciting market spaces.
