Are you planning to take advantage of the $7,000 worth of tax-free savings account (TFSA) contribution room that was added in 2025?
Is so, you should have a clear game plan for what kinds of assets you want to invest in.
If you are counting on your investment income to pay your bills, then low-risk index funds may be ideal.
If you’re saving up to buy something, then guaranteed investment certificates (GICs) are what you want.
If on the other hand you have high risk tolerance, then strategic bets on individual securities provide the highest potential returns (though with high risk).
In this article, I explore three TSX stocks that may be suitable TFSA holdings for enterprising investors.
Source: Getty Images
Granite REIT
Granite REIT (TSX:GRT.UN) is a Canadian industrial real estate investment trust (REIT) that invests in warehouses and other industrial properties. These types of assets tend to be good investments because they are fairly counter-cyclical compared to other REIT investments (there is always a need for warehouses).
One advantage that Granite REIT has presently is that it is pretty cheap. At today’s prices, GRT.UN trades at:
- 17 times earnings.
- 0.75 times book value.
- 14.5 times analysts’ consensus estimate of next year’s adjusted funds from operations.
- 12.5 times cash flow.
On top of that, the REIT has a 5% dividend yield, so there is considerable income potential here.
TD Bank
The Toronto-Dominion Bank (TSX:TD) is Canada’s second largest bank. It is also one of North America’s cheapest large bank stocks, trading at around 11 times earnings. The bank got cheap for a reason: it took on a major fine last year and had a $430 billion asset cap imposed on it by the US Department of Justice (DoJ). However, the fine is in the past, and the asset cap might paradoxically help TD. Prior to the asset cap being imposed by US authorities, TD had been holding Charles Schwab stock, which has been trading around 20 times earnings lately. TD’s own stock is at 11 times earnings with likely similar growth prospects. To comply with the US asset cap, TD is selling off the Schwab shares and using them to fund a large buyback. This sensible capital allocation is likely to benefit shareholders tremendously.
Brookfield
Last but not least we have Brookfield Corp (TSX:BN). This is a Canadian financial conglomerate that trades at a discount to its sum of the parts valuation. Its net asset value, counting the market values of the company’s stock portfolio, partnerships and Brookfield Asset Management stake, less its debt, is about $155 billion or $98 per share. Yet the stock itself only trades at $87 per share. So we have an $11 discount to net asset value here.
I don’t mean to say that Brookfield is for sure undervalued because of this discount. For one thing, Brookfield Asset Management shares are quite pricey, trading at 40 times earnings. However, Brookfield companies have a lot of things going for them right now, such as a deal supplying clean power to Microsoft and over $150 billion in committed capital waiting to be deployed. Overall, I’m expecting big things from Brookfield.
