Whether you’ve got a $7,000 bonus to put to work or a TFSA (Tax-Free Savings Account) contribution that’s still parked in cash in some sort of “high-interest” savings account, investors may wish to create a shopping list of TSX stocks they’d be interested in picking up as the TSX Index stalls on potential tariff fears. Indeed, the 30-day pause in 25% tariffs is now being pushed to early April. Indeed, there’s a chance it may be pushed out even further.
Some pundits view tariff threats as nothing more than a negotiating tactic — there’s a chance they could be spot-on. Though, only time will tell. And with the latest tariff delay (March to April), there’s more time and, I believe, a higher chance of reaching an agreeable middle ground of sorts.
Either way, there’s still time for negotiations to (hopefully) reach a deal that could see most (or perhaps all) tariffs be scrapped. Now, it’s impossible to know for sure what lies ahead. A bull-case scenario could see no tariffs and a solid gain in the TSX Index as well as the Canadian dollar. At the same time, a bear-case scenario is still very much possible. However, it’s uncertain just how much tariffs are priced into the stock market and their magnitude and anticipated duration. In any case, this piece will look at two names that I expect can fare well, regardless of what’s up next with tariff talks.
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Bank of Nova Scotia
Despite last year’s solid second-half gain, I continue to view Bank of Nova Scotia (TSX: BNS) as one of the better banks for Canadians’ buck as they look to “spring clean” their portfolios by trimming overrun positions in favour of value plays. At the time of writing, shares of BNS trade at 14.9 times trailing price to earnings (P/E) alongside a very generous 5.9% dividend yield.
For a premier Big Six Canadian bank, you’re getting a hefty, growing dividend at a very modest price of admission. Though more challenges could lie ahead (tariffs, rates, and the road ahead for international and domestic markets), I think management is cut out to manage through any further headwinds as its stock eyes new all-time highs. As the bank seeks to sell assets in Latin America, perhaps there will be more than enough dry powder to take advantage of opportunities south of the border.
Indeed, Bank of Nova Scotia’s Canada’s most internationally focused bank. As it explores potential in the U.S. market, I think there’s room for a bit of multiple expansion, as investors start treating Scotia as a “growthier” bank than some of its peers as the global economy looks to move on from a rather muted past few years.
TFI International
TFI International (TSX: TFII) continues to look oversold and undervalued after settling down after its brutal post-quarter crash. The stock has now shed around 40% of its value from peak levels in just a few months. While tariff threats could postpone a recovery, I think that TFI remains a solid option for deep-value investors willing to keep on trucking with the firm.
Recently, the company ditched its plans to move to the U.S. — a move that’s sure to be appreciated by Canadian investors seeking to buy Canadian at this time of year. In any case, I think it’s time to get greedy as others remain fearful — something that’s easy to say but hard to put into practice. Though TFII stock could have a further fall if a bear-case scenario pans out on the tariff front, I think incremental buying over time could help dip-buyers average down a fairly decent cost basis, whether it’s closer to $130 or $95-100, a level that I view as a robust support level.
