This year, some interesting trends are shaping up. While Trump tariffs did make the headlines, the large-cap stocks dependent on exports showed a moderate decline. However, it is better to not be too optimistic and diversify your portfolio across defensive stocks or stocks with global outreach. Another interesting perspective is to use a contrarian approach to reduce risk from current macro uncertainty. You could plan your 2025 Tax-Free Savings Account (TFSA) investing strategy with these stocks.
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Where to invest a $7,000 TFSA contribution
Telus stock
Telus (TSX: T) is a value play trading at a nine-year low. While declining profits and rising debt levels were the reasons for the share price dip, its revenue continued to increase. The defensive nature of the telecom business and one of the three market leaders in the oligopoly market makes it a stock you want to own amid uncertainty. Telus has even overcome competitive pricing and set its subscriber base. Now, it has to monetize its subscribers by offering more services and growing average revenue per user.
The stock can give you more than a 7.5% annual dividend yield, which could outperform a bear market if that is where TSX is headed in 2025.
Parkland stock
Parkland (TSX: PKI) is a contrarian pitch. The company operates gas stations and convenience stores across 26 countries in the Americas. While it is an international fuel distributor, it also refines oil. When oil price rises, its refinery margin takes a hit. However, its refinery margin accounts for only 13% of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Most of its EBITDA comes from retail and commercial sales. This diversification helps Parkland sustain its dividends even in a weak economy.
Parkland has been paying dividends since 2017. It reduced dividend frequency from monthly to quarterly in 2022. Moreover, it has grown dividends by 1.7%, even in a difficult economic environment. The stock could be a value buy in the current environment, as the share price has slipped 20% to around $37 from a year ago, allowing you to lock in a 3.7% yield.
Bombardier stock
Bombardier (TSX: BBD.B) stock has dipped almost 25% in December 2024 and January 2025 on the heels of a weak supply chain. While the business jet maker once again delivered revenue and earnings above its 2024 guidance, the deliveries of 146 aircraft fell short of the targeted 150.
However, the service segment delivered the best earnings to date.
The company has improved its operating profit margins by reducing research and development costs. It has a US$14.4 billion order backlog, which is two years’ worth of revenue if there are no delays in execution or cancellation of orders.
The management sees strong flying activity for business jets, which means higher revenue for its after-market services. While the revenue and net earnings growth have slowed, the market seems to have overreacted. The stock is trading at a forward price-to-earnings (P/E) ratio of 8.45, its lowest since December 2023.
The long-term outlook is bright for Bombardier as it taps the defence and pre-owned aircraft markets to increase its revenue from the existing aircraft models.
Descartes Systems
Descartes Systems (TSX: DSG) systems is a contrarian value play. Its supply chain management solutions earn revenue when trade activity is high. Hence, you see the stock price rise in October before the holiday season. Tariffs discourage trade volumes, and Trump’s tariffs are specially targeted at high-volume trades. You could see a steep correction in Descartes’s stock price while exporters negotiated the deal. However, the demand for its global trade intelligence solutions could keep the revenue growth in the mid-teens.
Once a negotiation is achieved, trade volumes could increase to make up for the low trades. At that time, Descartes could see strong demand for its customs solutions, driving the stock upwards.
How to invest in TFSA in 2025
We could see a repeat of 2018 as trade war uncertainty keeps investors on their toes over fears of weakness in the export-led Canadian economy. The TSX Composite Index could see a modest rally. The best way to invest in such a market is to invest small amounts of your TFSA contribution throughout the year so that you do not miss out on any dips in value stocks.
