2 Seriously Cheap Stocks to Buy and Hold in a TFSA

I’d look to buy Leon’s Furniture (TSX:LNF) and another top dividend value stock before July ends.

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TFSA (Tax-Free Savings Account) investors looking for undervalued stocks to stash away from the long haul may wish to check out the handful of names that fell under subtle pressure over the past week. Undoubtedly, market volatility is back on Bay Street, with the broad TSX Index retreating almost 2% from all-time highs hit back in mid-July.

Indeed, the pain felt by Canadian stocks has been minimal compared to U.S. names, which are selling off quite viciously. With the Nasdaq 100 flirting with correction territory just two weeks after hitting new all-time highs, questions linger about how much damage will be done before it’s safe for tech-savvy investors to get back in the water.

As always, there’s no bell that goes off when the correction (or bear market, which entails a 20% fall from peak to trough) is over, and stocks are ready to bounce back and make up for the lost time.

In this piece, we’ll check out two incredibly cheap stocks that look attractively priced as we move into a more value-conscious market climate, one that could help the TSX put the Nasdaq 100 to absolute shame from here.

Bank of Montreal

The broader basket of Big Six Canadian bank stocks looks like grand buys right about now. I think you could do well over the next three years with any one of them at current prices. They’re fresh off many years of dealing with industry and macro headwinds. After doing nothing for three years, I view Bank of Montreal (TSX:BMO) stock as an intriguing pick right here. You’re getting a nice 5.2% dividend yield alongside a decent 14.4 times trailing price-to-earnings (P/E) multiple.

Though rival TD Bank is even cheaper, with a similarly sized yield, I’d argue that BMO stock is worth the slight premium given its lack of regulatory overhang from TD’s past money-laundering issues. In any case, BMO stock is a dividend hero to stash in your TFSA if you seek a dividend-rich bargain for summer.

Of course, BMO stock may not be a timely or “sexy” type of investment, but I see it as a worthy pick-up for patient long-term investors seeking a good mix of income and appreciation.

Created with Highcharts 11.4.3Bank Of Montreal PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Leon’s Furniture

Leon’s Furniture (TSX:LNF) is another passive income play that’s trading at a very reasonable multiple. The Canadian furnishing company behind such names as The Brick has a 2.91% dividend yield and trades at 11.59 times trailing P/E. This cheap multiple is despite the fact that the stock has been absolutely roaring over the past year.

Year to date, LNF stock is up almost 30%, putting it within striking distance of all-time highs not seen since 2022. I’m betting Leon’s will hit new highs by the time summer’s over. Sure, discretionary purchases are in a mixed spot right now, but with some of the most intriguing value-conscious offerings in furniture, I’d be willing to give the firm the benefit of the doubt.

Further, management has played a hard hand exceptionally well. Though the dividend yield isn’t as high as it used to be, I view the payout as generous and subject to more growth over the coming years. So, if you seek a dividend play on the cheap for your TFSA, perhaps it’s time to give the $1.65 billion mid-cap furnishing play a second look.

Created with Highcharts 11.4.3Leon's Furniture PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

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Fool contributor Joey Frenette has positions in Bank Of Montreal and Toronto-Dominion Bank. The Motley Fool recommends Leon's Furniture. The Motley Fool has a disclosure policy.

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