Your TFSA (Tax-Free Savings Account) retirement portfolio is bound to hit some rough patches over the years. The key is to not find reasons to overreact or panic when fear dominates, and there’s blood on the Streets. Undoubtedly, acting on emotion can be tremendously harmful to your wealth and could set your retirement back by a bit.
As the markets move forward in what’s been a relieving year, investors should concentrate on the stocks that have yet to go into full-blown rally mode. In this piece, we’ll look at a few TFSA stock to consider if you’re looking to give your long-term TFSA retirement fund a jolt.
Consider shares of Aritzia (TSX:ATZ) and TC Energy (TSX:TRP), two intriguing value options worth watching right here.
TFSA stock pick #1: Aritzia
Aritzia is more than just a women’s clothing retailer, it’s a company that knows how to build brand affinity. Further, the Canadian company also knows how to impress its consumers. With impressive store layouts and a solid online presence, Aritzia is a retailer that not even a recession could derail.
Indeed, discretionary spending could fall sharply if the recession does arise. And for ATZ shareholders, it’s quite an uneasy time to be hanging in there. The stock has been a serious laggard on the year, plunging a whopping 24% YTD (year to date). Do retailers face an uphill battle, as recession risks weigh? Sure, but it’s a mistake to count Artizia out of the game.
The company’s recent quarterly results haven’t been horrid. In fact, the company has surpassed earnings estimates on the bottom line for its last few quarters. While there’s room for margins to expand, I think things may finally be looking up for the retailer, as the company looks to expand into the U.S. market while continuing to improve the power of the brand and, with that, margins.
In the meantime, Aritzia stock seems untimely ahead of an economic contraction. However, it’s the long-term growth potential that has me most excited about the stock while it’s hovering at around $35 per share.
At 21.9 times trailing price to earnings, Aritzia is a “growthy” retailer that ought to be worth a greater premium. In 10-15 years, count me as unsurprised if Aritzia becomes the next big thing to arise from the TSX Index. Even with recent declines considered, ATZ stock is still up 128% over the past five years.
In short, it’s Aritzia’s brand power that will help it recover. That alone makes me a major bull on the stock.
TFSA stock pick #2: TC Energy
TC Energy is an often overlooked midstream energy company and for no good reason. The stock yields an impressive 6.95% and provides investors with exposure to Canada, the U.S., and Mexico. The Mexican gas pipeline assets in particular are intriguing and could help fuel an swelling cash flow stream for years to come.
At 12.3 times forward price to earnings (34.1 times trailing), TRP stock is too good to pass up if you’re in it for the passive income.
Like ATZ stock, there’s a lot of negative momentum in the name right now, with shares now off 30% from their highs. In any case, I view TRP as more of an unappreciated bargain than a trap for value investors.
