3 TFSA Stocks I’m Eyeing for My 2024 Contribution

In 2024, I’ll be adding dividend stocks like Brookfield to my account.

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In 2024, Tax-Free Savings Account (TFSA) contribution room will likely increase. For the new year, investors are likely getting $7,000 worth of room. If you were 18 or older in 2009, that means your accumulated contribution room will increase from $88,000 to $95,000. If you turn 18 next year, it means you’ll be getting your first $7,000 worth of TFSA contribution room. If you’re somewhere between those two birth dates, you’ll have an amount of accumulated contribution room that depends on your age. Either way, you’re getting some new TFSA space next year.

Personally, I plan on using my new TFSA contribution room to the fullest. I have a number of stocks and index funds I’ll be buying using the space I have accumulated. In this article, I will share three of the stocks I plan on buying next year with my unused TFSA contribution room.

Brookfield

Brookfield Corporation (TSX:BN) is a diversified financial conglomerate. It is involved in asset management, insurance and private equity. This stock is a classic “risk vs. return” tradeoff. The company is heavily indebted and will suffer if central banks resume the interest rate hikes they undertook all through 2022. However, if rates stay where they are now or go down, BN will truly thrive. The company has a collection of assets that are among the best owned by any company in the world:

  • A 75% stake in Brookfield Asset Management, Canada’s most profitable financial company (it has a 50% net margin).
  • A portfolio of real estate “trophy properties” that collect high rents due to their desirable locations.
  • An insurance company that is experiencing rapid growth.

Brookfield has been very busy this year expanding its business, buying up insurance companies like American Enterprise and the shipping company Triton. This expansion has been controversial because it has taken place in a period of rising interest rates, but BN (at the corporate level) appears to be quite solvent. Its credit score was recently updated to “A” by DBRS Morningstar.

CN Railway

Canadian National Railway (TSX:CNR) is a Canadian transportation stock I owned in the past and would consider owning again. It’s a railroad that transports more than $250 billion worth of goods across Canada and the United States each and every single year. The company has a solid competitive position, as it has only one competitor in Canada and only a small handful in the United States. Investors don’t seem eager to fund new railroad startups, so it seems like this situation will persist for some time.

CN Railway’s earnings have been declining somewhat in recent quarters, as shipments of certain types of goods have slowed down. Fearful investors have sold the stock, but CNR is a classic cyclical; it’ll likely return to strong profit growth in the future. I’ll buy it again if it hits $135 or 15 times earnings.

TD Bank

Toronto-Dominion Bank (TSX:TD) is a Canadian bank stock I have owned for many years. At one point this year, I sold about 99% of my TD shares, as I was growing concerned about all of the fines and Department of Justice investigations its U.S. subsidiary was enduring. Later, I changed my mind and bought back about 15% of my original position. Banks do sometimes get fined and sued for large sums, but it’s rarely enough to turn them unprofitable.

TD is justifiably down from its 2021 high of $95, but, in my opinion, it’s worth buying at prices of $80 and below.

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 Andrew Button has positions in Brookfield, Brookfield Asset Management, and Toronto-Dominion Bank. The Motley Fool recommends Brookfield, Brookfield Asset Management, Brookfield Corporation, and Canadian National Railway. The Motley Fool has a disclosure policy.

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