Got $5,000 to Invest? Why I’d Consider 3 Financial Stocks for My Permanent Portfolio

Brookfield Corp (TSX:BN) is a top tier financial stock.

Do you have $5,000 you want to invest in the markets?

If so, TSX financial stocks are among the best assets you can buy. Over the years, TSX financials have delivered good returns, and while the future is never clear, these companies still have the characteristics that made them top performers in years gone by. These include conservative lending standards, high capital ratios, and strong competitive positions.

TSX financials have been among the nation’s best-performing equities for a reason. They are very much worth betting on. In the ensuing paragraphs, I’ll share the three TSX financials I’d buy if I were just starting out with $5,000 today. As luck would have it, these three are stocks that I in fact own – one of which I have not shared very frequently on the Motley Fool.

coins jump into piggy bank

Source: Getty Images

Brookfield

Brookfield Corp (TSX: BN) is a diversified financial conglomerate. It is most active in asset management, renewable energy, infrastructure, and insurance. Its insurance business has become a progressively bigger part of the whole over the years. Recently Brookfield management said that the company might sell most of its other assets to the insurance business, forming a Berkshire Hathaway-like entity in the process.

Brookfield Corp’s main claim to fame is its discount to its sum of the parts (SOTP) valuation. The market value of its assets less the book value of its debt is considerably less than the company’s own market cap, which may indicate undervaluation. Whether SOTP is a valid approach to valuation is debatable – it ignores the layering of taxes to the corporate level – but at any rate, Brookfield’s distributable earnings are growing and its businesses are doing many high profile deals. It’s definitely worth a look.

TD Bank

The Toronto-Dominion Bank (TSX: TD) is the longest-standing stock in my portfolio. I’ve held it on and off for over six years. I exited TD stock at one point last year, but I started buying it back again after it dipped to $74. What caused the stock to dip to $74 was it took a huge fine and asset cap as a result of money laundering violations in the United States. The fine definitely depressed last year’s earnings but the asset cap may have been a blessing in disguise, as it loosened up funds that TD used to fund a massive buyback program. With TD trading at about 11 times earnings – cheaper than most large North American banks – that buyback money is probably being well spent.

Postal Savings Bank

Postal Savings Bank of China (OTC: PSTV.Y) is a Chinese bank stock I’ve owned for a few years now. It is one of the only big Chinese banks that does not have much exposure to China’s ailing commercial property sector (only 3% of its loans are to that sector). PSTV.Y is truly dirt cheap, trading at 5.6 times earnings and 0.54 times book value. It also has a very high dividend yield and a low payout ratio – a mouth-watering combination for a dividend stock. I’m quite happy holding Postal Savings Bank stock, and I’d consider it for investment if I were just starting off today with $5,000.

Fool contributor Andrew Button has positions in Brookfield, The Toronto-Dominion Bank, Postal Savings Bank of China, and Berkshire Hathaway. The Motley Fool has positions in and recommends Brookfield. The Motley Fool recommends Berkshire Hathaway and Brookfield Corporation. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Printing canadian dollar bills on a print machine
Dividend Stocks

Buy This Little-Known Cash Machine for Your TFSA

Buy this lesser-known TSX real estate stock to earn attractive monthly dividends in your TFSA while benefiting from its growing…

Read more »

young people stare at smartphones
Dividend Stocks

BCE vs. Telus: Which Telecom Stock Has the Better Dividend Outlook After Q3?

BCE and Telus both cut their dividends over the past 18 months. After Q3, see which Canadian telecom stock has…

Read more »

Muscles Drawn On Black board
Dividend Stocks

Dividend Powerhouses: Top Canadian Stocks to Enhance Your Portfolio

These two Canadian dividend powerhouses offer attractive yields, encouraging earnings trends, and growth opportunities that could strengthen your portfolio over…

Read more »

A series of red ladders lead to successively higher levels
Dividend Stocks

Is Brookfield Stock a Buy, Sell, or Hold for 2027?

Is Brookfield stock a buy, sell or hold for 2027? Explore its latest earnings, insurance expansion and potential for long-term…

Read more »

Traffic jam with rows of slow cars
Dividend Stocks

1 Magnificent Canadian Stock Down 59% to Buy and Hold Forever

Boyd Group stock is down 59%, yet Q2 sales topped US$1 billion and margins hit 13.4%. See why this TSX…

Read more »

diversification is an important part of building a stable portfolio
Dividend Stocks

Build a Lucrative Passive-Income Portfolio With Just $35,000

You can build a rewarding passive-income portfolio with just $35,000 by investing in these two attractive TSX dividend stocks, offering…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How Much Would You Need in a TFSA to Replace a $500 Monthly Bill?

Replacing a $500 monthly bill starts with a realistic capital target and an income plan that can grow.

Read more »

Happy golf player walks the course
Dividend Stocks

2 TSX Dividend Stocks to Consider Now for Steady Passive Income

With established business models, reliable cash flows, a strong dividend track record, and clear growth prospects, these two stocks stand…

Read more »