With a new year right around the corner, TFSA (Tax-Free Savings Account) investors will have yet another opportunity to make another $7,000 contribution in January. Indeed, it’s just north of a month away, so if your 2024 and 2023 contributions are still sitting around in cash, perhaps it’s time to start a list of stocks you’d be willing to buy before the new year.
Indeed, there are plenty of great Canadian stocks to watch as the TSX Index looks to have its moment in the sun after yet another year of trailing the S&P 500. Though only time will tell, some folks out there view the value-conscious TSX 60 as potentially a better bet. Indeed, some sort of growth-to-value rotation may be enough to tilt the tables ever so slightly in the Canadian stock market’s favour.
In any case, I still think TFSA investors should find the right balance of domestic, international, and U.S. stocks so that they’re properly diversified across geographies. In this piece, we’ll look at two Canadian stock picks that may be worth pouncing on in the coming weeks and months.
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Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) is quickly becoming one of my preferred picks in Canada’s banking scene, and it’s not just because of its modest valuation or newfound momentum that’s helped propel the stock more than 21% in the past three months.
Indeed, if you lost patience with the name, you may just have to pay a higher price ($78 and change per share right here) to punch your ticket back into Canada’s best internationally focused bank.
The good news? Shares are still cheap (13.78 times trailing price-to-earnings (P/E)) and bountiful (5.41% dividend yield).
More recently, the bank got a vote of confidence from analysts over its earnings growth trajectory going into the new year. Going into 2025, I view BNS stock as a relative value play that could be next in line to hit new highs. As such, TFSA investors shouldn’t sleep on the name if they’ve been meaning to put some cash to work on stocks.
Nutrien
Things have not been going all too well for shares of Nutrien (TSX: NTR) so far this year, with the name down around 15% year to date. Indeed, the fertilizer market may not be ready for any sort of timely recovery in the near term. That said, if you’re a truly long-term investor, I think the 4.7% dividend yield is worth collecting while the stock’s trading at multi-year lows.
Sure, Nutrien is facing pressure on a number of fronts (think its lending unit and lower agricultural commodity prices). However, the dividend is on some pretty sound footing, and if you seek a deeper-value option, perhaps it’s time to start doing a little bit of buying.
While I’d caution against bottom-fishing in a name that still has a lot of negative momentum behind it, I do think building a partial position over the coming year makes a lot of sense if cheap dividends and a lower correlation to the rest of the market are what you seek.
