3 TSX Stocks I’d Buy With a $6,500 TFSA Contribution

Top TSX stocks like EQB Inc. (TSX:EQB) and others could make a perfect addition to your Tax-Free Savings Account in 2023.

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Last year, the Canadian federal government announced that it would increase the annual contribution to a Tax-Free Savings Account (TFSA) to $6,500. That would bring the cumulative contribution amount, assuming you have been eligible to contribute since January 2009, to $88,000. The TFSA remains one of my favourite registered accounts as it offers tax-free gains combined with incredible flexibility.

Today, I want to zero in on three TSX stocks that I’d look to snatch up with our $6,500 contribution amount.

Why I’m betting on this TSX stock with my first TFSA contribution!

The Canadian real estate space has taken its lumps since the Bank of Canada (BoC) underwent a significant monetary policy shift in the winter and spring of 2022. However, prices and sales have also shown some resilience as demand remains strong even in an uncertain climate. EQB (TSX:EQB) is a Toronto-based company that provides personal and commercial banking services to retail and commercial customers throughout Canada. Shares of this TSX stock have jumped 6.7% month over month as of close on May 11. The stock is up 11% in the year-to-date period.

EQB unveiled its first quarter (Q1) fiscal 2023 earnings on May 2. It delivered adjusted net income of $101 million — up 10% compared to Q1 fiscal 2022. Meanwhile, EQB continued to receive rave reviews from top credited publications like Forbes as one of the best banks in Canada. Its deposits increased 12% year over year to $8.1 billion.

Shares of this TSX stock currently possess a favourable price-to-earnings (P/E) ratio of 8.3. Meanwhile, TFSA investors should also be pleased with its quarterly dividend of $0.37 per share. That represents a 2.3% yield.

This Canadian bank stock offers great value and income over its peers right now

Scotiabank (TSX:BNS) is the second TSX stock I’d look to buy in this environment. This is the fourth largest of the Big Six Canadian banks. It is something called “The International Bank” due to its large global reach, particularly in Latin America. Shares of Scotiabank have increased 2.1% so far in 2023. However, this TSX stock is still down 17% compared to the previous year.

Investors can expect to see Scotiabank’s Q2 fiscal 2023 earnings on Wednesday, May 24. In Q1 2023, the bank reported adjusted net income of $2.36 billion, or $1.85 per diluted share — down from $2.75 billion, or $2.15 per diluted share, in Q1 fiscal 2022. Scotiabank and its peers are expected to be challenged by economic headwinds in the near term. Investors who can stomach some short-term volatility should see this as a great buy-low opportunity.

This top TSX stock possesses an attractive P/E ratio of 9.2 at the time of this writing. Scotiabank offers a quarterly distribution of $1.03 per share, which represents a tasty 6.1% yield.

One more promising TSX stock I’d stash with my final TFSA contribution

TMX Group (TSX:X) is the third TSX stock I’d look to stash in our hypothetical TFSA in 2023. This Toronto-based company operates exchanges, markets, and clearinghouses primarily for capital markets in Canada and around the world. This TSX stock has jumped 5.4% over the past month. Its shares have climbed 9.3% so far in 2023. Investors should be eager to own this stock in their TFSA for the long term.

The company released its Q1 fiscal 2023 earnings on May 2. TMX Group saw revenue rise 4% year over year to a record $299 million. Meanwhile, adjusted diluted earnings per share increased 2% compared to Q1 FY2022 to $1.85. This company put together a very solid first quarter in the face of challenging market conditions.

Shares of this TSX stock possess a solid P/E ratio of 22 at the time of this writing. TMX Group offers a quarterly dividend of $0.87 per share, representing a 2.3% yield. The stock has achieved seven straight years of dividend growth, which makes TMX Group a Canadian Dividend Aristocrat.

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, EQB, and TMX Group. The Motley Fool has a disclosure policy.

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