TFSA Investors: 2 Cheap Canadian Stocks for Retirees

Brookfield Corp. (TSX:BN) stock and another retiree-friendly play that’s being undervalued in the face of potential recessionary headwinds.

| More on:
Retirees sip their morning coffee outside.

Source: Getty Images

Save your TFSA (Tax-Free Savings Account) for the stocks you think will do best over the long haul. Undoubtedly, the market tides will always get rough for some reason or another. As a self-guided TFSA investor, it’s important that you don’t react to negative market-moving news after the fact. Instead, it can pay dividends to think like a true contrarian.

As the so-called September slump continues (the broader S&P 500 fell 0.6% on Tuesday), it may be a wise idea to revisit your stock watchlist to see if any names are approaching a level you’d be willing to buy at.

Indeed, it’s times like this, when stocks are quickly on the retreat over a wide range of news events (think climbing rates on the 10-year U.S. Treasury note), that you can stretch your investment dollar that much further.

So, without further ado, let’s consider two undervalued TSX stocks that are suitable for retirees as well as younger investors.

Brookfield Corp.

Brookfield Corp. (TSX:BN) is still a great one-stop shop for alternative asset exposure. Undoubtedly, the Brookfield spin-off (BAM.A spun off into BN and BAM) may have been a bit confusing to those who didn’t keep up with the firm last year. Still, Brookfield Corp. is the play that most fans of the original Brookfield (BAM.A) should continue to love.

At writing, shares of BN are in recovery mode after a painful 2022 plunge. With shares down around 25% from their all-time highs, I view any September turbulence as an opportunity to snag shares of one of the best-run alternative asset managers on the planet at an even larger discount.

The stock goes for 11.1 times forward price-to-earnings, and though a recession may present itself over the coming quarters, I still think Brookfield Corp. is cheap enough to continue its relief rally. Further, demand for cash-generative alternative assets could continue to sail higher, especially if stocks and bonds are due for another year of pain.

Canadian Tire

Up next, we have Canadian Tire (TSX:CTC.A), a venerable Canadian retailer that’s sporting a dividend yield on the higher end of the historical range. Indeed, shares yield almost 4.5% after the latest spill in the stock.

Though consumer-spending headwinds will make it hard for CTC.A stock to rally in a potential recession, I still think some chance of a soft-landing type of recession is already baked in at current prices. The stock is pretty much where it was five years ago, in the mid-$150 range.

With a mere 11 times trailing price-to-earnings multiple, and a steady loyalty program in place, I view Canadian Tire as a resilient discretionary retailer that’s bound to recover once recession fears are, in due time, put to rest.

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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield and Brookfield Corporation. The Motley Fool has a disclosure policy.

More on Dividend Stocks

money goes up and down in balance
Dividend Stocks

This 6% Dividend Stock Is My Top Pick for Immediate Income

This Canadian stock has resilient business model, solid dividend payment and growth history, and a well-protected yield of over 6%.

Read more »

ways to boost income
Dividend Stocks

1 Excellent TSX Dividend Stock, Down 25%, to Buy and Hold for the Long Term

Down 25% from all-time highs, Tourmaline Oil is a TSX dividend stock that offers you a tasty yield of 5%…

Read more »

Start line on the highway
Dividend Stocks

1 Incredibly Cheap Canadian Dividend-Growth Stock to Buy Now and Hold for Decades

CN Rail (TSX:CNR) stock is incredibly cheap, but should investors join insiders by buying the dip?

Read more »

bulb idea thinking
Dividend Stocks

Down 13%, This Magnificent Dividend Stock Is a Screaming Buy

Sometimes, a moderately discounted, safe dividend stock is better than heavily discounted stock, offering an unsustainably high yield.

Read more »

Canadian Dollars bills
Dividend Stocks

Invest $15,000 in This Dividend Stock, Create $5,710.08 in Passive Income

This dividend stock is the perfect option if you're an investor looking for growth, as well as passive income through…

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

3 Compelling Reasons to Delay Taking CPP Benefits Until Age 70

You don't need to take CPP early if you are receiving large dividend payments from Fortis Inc (TSX:FTS) stock.

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

Better Dividend Stock: TC Energy vs. Enbridge

TC Energy and Enbridge have enjoyed big rallies in 2024. Is one stock still cheap?

Read more »

Concept of multiple streams of income
Dividend Stocks

Got $10,000? Buy This Dividend Stock for $4,992.40 in Total Passive Income

Want almost $5,000 in annual passive income? Then you need a company bound for even more growth, with a dividend…

Read more »