As we move closer to the Canadian federal election, scheduled for April 28, 2025, there’s bound to be a clash as the puck drops for the first round of the Stanley Cup Playoffs. Indeed, it’s a strange time to have an election. While Canadian investors will have a tough choice on their hands, I think that TFSA (Tax-Free Savings Account) investors can appreciate any added top-up contributions moving forward. Indeed, Conservative leader Pierre Poilievre suggested that an additional $5,000 top-up (in addition to the $7,000 annual limit) for funds to be invested in Canadian securities could be in the cards.
As of right now, it remains to be seen as to whether other parties are getting behind such a TFSA top-up plan. Additionally, there’s not much clarity as to when such a proposal would be implemented and how to verify proceeds would be used to purchase Canadian securities (over international or U.S. securities). Either way, it’s an intriguing proposal that I’m sure has the attention of TFSA investors who want more room to work with in any given year.
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What would you buy if you had an extra $5,000 for TSX stocks?
If Canadians have an extra $5,000 to put to work on TSX stocks, I think it makes sense to start thinking about what to buy. Indeed, the “buy Canadian” theme could become much stronger should such a plan come into effect. Of course, it could take time for such a proposal to see the light of day.
Even if such a plan never materializes, I still think buying Canadian stocks for one’s TFSA is the right call, even if the loonie is on a nice run versus the U.S. greenback. Though I wouldn’t get my hopes up for a $5,000 TFSA top-up, I would monitor the situation closely and start forming a list of names they would buy had they had an extra $5,000 in any given year. In this piece, we’ll look at a trio of names I’d stash on my watchlist.
Alimentation Couche-Tard
If a TFSA top-up ever happened, Alimentation Couche-Tard (TSX:ATD) is one of the names I’d be quick to buy more shares of. Indeed, the convenience store icon is still trying to acquire the parent company of 7-Eleven. At this juncture, progress seems to have stalled. Regardless, I’m a fan of the valuation, the growth-by-acquisition strategy, and the ability to make it through tariff headwinds.
At just over $70 per share, ATD shares go for 18.6 times trailing price to earnings (P/E). And with a fat 1.12% dividend yield, one that’s growing fast, I’d not shy away from the name, even as regulatory hurdles ultimately end up in no deal for Alimentation Couche-Tard in its lengthy pursuit of the great 7-Eleven. Time will tell if a deal can be struck in light of recent hurdles. Either way, the stock’s cheap and would be one of my first picks if I had an extra $5,000 to put to work in Canadian stocks.
Restaurant Brands International
Restaurant Brands International (TSX:QSR) is another name that looks like a worthy buy for investors already envisioning what they’d buy if they had an extra $5,000 in TFSA space. The stock is dirt cheap at 19.5 times trailing P/E.
The star of the show has to be the 4% dividend yield, which is well-covered and growing at an impressive rate. With some of the most cherished fast-food brands out there and a value menu that could shine as the Trumpcession hits Canada, I’d not sleep on QSR shares. Furthermore, with a 0.74 beta, the stock could be a less wobbly place to shield from broad market volatility should tariff tremors become more chaotic going into year’s end.
