Just like that, and the TSX Index is closing in on all-time highs again after experiencing just a bit of turbulence as Trump tariff woes weighed to start the month. Indeed, it was an uneasy time to consider putting new money to work on TSX stocks. And if you flinched, the window seems to be mostly closed. Though we could be headed below multi-week lows if tariff talks return in full force, I’d be inclined to steadily put money gradually into stocks rather than timing short-term moves up or down.
Indeed, things could go either way, and despite the recent winning streak for the TSX, I still see plenty of value out there for passive-income investors seeking towering yields at pretty reasonable prices of admission. In this piece, we’ll check out two names that may be a bargain as the TSX looks to pick up where it left off before the Donald Trump slump. Sure, it may be too early to start loading up, but if you haven’t started doing some buying, now seems like a decent time while rich (and safe) yields are still out there.
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Canadian Tire
Canadian Tire (TSX: CTC.A) stock has been underperforming the broad markets over the past decade. Undoubtedly, retail has been a tough place to be, and it could continue to be as tariffs look to be implemented. Despite tariff threats, though, I view Canadian Tire as well-equipped to power through any looming headwinds facing the Canadian economy.
At the end of the day, the retailer can shift its product mix in a way to side-step various tariffs. Indeed, the “buy Canadian” mindset of consumers is one that I believe could stick around for years after tariffs are taken off the table. And there’s no better way to buy Canadian than with retailers like Canadian Tire. Though the next year or two could continue to be turbulent, I like the long-term setup.
The stock trades at 9.5 times trailing price to earnings (P/E), making it one of the best deals in all of retail right now. Combined with a 4.76% dividend yield, I think it’s tough to pass on the name as it wanders into more choppy waters. With plenty of cash to put to work after the sale of Helly Hansen, perhaps Canadian Tire should acquire some prized assets from the Hudson’s Bay Company as it goes into liquidation. Undoubtedly, the Stripes brand is iconic, and I believe it would do profoundly well in the hands of Canadian Tire, another cherished Canadian company that may be able to expand the brand in a meaningful way.
CT REIT
If you’re looking for an even higher yield, perhaps the real estate investment trust (REIT) that stands behind Canadian Tire is worth going after. CT REIT (TSX: CRT.UN) is one of my favourite REITs for a reason: it’s a retail REIT that puts most (almost all) of its eggs in a single basket. In my view, it’s better to have one powerful retail tenant than a basket of sub-par ones.
As its name suggests, Canadian Tire is its top tenant by far. And though Canadian Tire may stumble in a recession, it won’t miss a month’s rent, given its impressive balance sheet and fairly durable cash flows. As such, I view CT REIT as one of the safest ways to score a 6.4% yield in the retail REIT scene.
