When markets dip, smart investors don’t panic. They look for value. That’s why a $14,000 Tax-Free Savings Account (TFSA) could benefit from buying strong Canadian stocks on the dip. Three names stand out: Bank of Nova Scotia (TSX:BNS), Cenovus Energy (TSX:CVE), and Lundin Mining (TSX:LUN). Each operates in a cyclical sector, but each brings unique stability, income, and upside if the market rebounds.
Scotiabank
The Bank of Nova Scotia is Canada’s third-largest bank. Its second-quarter results showed net income of $2.032 billion, slightly down from $2.092 billion a year ago. Basic earnings per share (EPS) were $1.48, versus $1.57 previously, and return on equity dropped to 10.1% from 11.2%. Revenue rose by 9% to about $9.1 billion. The bank increased provisions for loan losses by $1.40 billion due to tariffs and economic worries.
That weighed on the Canadian banking unit, which saw income fall by 31%. Despite this, its diversified global operations and solid fee income from wealth management help balance the drag. The dividend yield remains near 5.8%, offering reliable income from a blue-chip Canadian bank.
Bank stocks typically recover after market dips. Scotiabank looks strong enough to return to its historical path once loan loss provisions ease. The bank also sold some overseas assets to focus on North America, especially U.S. regional banking through its stake in KeyCorp. While short-term pressures exist, the long-term view remains intact.
Cenovus
Cenovus Energy is the next pick. It posted $13.3 billion in revenue for the first quarter of 2025, and net income came in at $859 million, down from $1.18 billion year-over-year, but still beating expectations at $0.47 per share. Operating cash flow reached $1.3 billion, with $2.2 billion in adjusted funds flow and nearly $1 billion in free funds flow. Cenovus also increased its dividend by 11% to $0.80 annually. That reflects strong cash generation, especially from upstream production of 818,900 barrels of oil equivalent per day.
Cenovus offers around a 4.3% yield at writing, and benefits from pipeline expansions like Trans Mountain, which reduces transportation costs. Falling oil prices did pull income down, but production remains high and resilient. The Canadian stock sells at a discount during economic worries, making it a classic dip buy for income and value.
Lundin
Finally, Lundin Mining offers exposure to metals that power modern infrastructure. In Q1 2025, the Canadian stock raked in US$963.9 million in revenue. Lundin Mining reported net earnings from continuing operations of US$138.1 million in Q1 2025, versus US$38.3 million in Q1 2024.
That turnaround reflects higher copper output of 77,000 tonnes, alongside solid gold and nickel production. Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) stood at US$388 million and operating cash flow at US$337 million. Free cash flow was US$21.6 million.
The Canadian stock recently sold its European assets to focus on growth opportunities like the Vicuña copper-gold project with BHP. Guidance remains firm, with targets for strong production and cash flow this year. Lundin also initiated share buybacks and some dividends. While its yield is modest, around 0.77%, the growth potential in copper and gold gives it upside in a global demand recovery.
The strategy
So how do they fit into a dip-buy strategy? A TFSA investment split evenly among these three names of $4,666 each offers diversification across banking, energy, and mining. Scotiabank brings income and stability. Cenovus delivers cash flow and a rising dividend tied to energy trends. Lundin offers exposure to metal demand and earnings growth.
Each has cyclical exposure but also stabilizing factors. Scotiabank’s global presence and diversified income cushion macro shocks. Cenovus has cash in the bank and pipeline cost advantages. Lundin has solid production and strategic assets under management.
Of course, none are without risk. Banks face loan-loss uncertainty and economic slowdown. Energy depends on volatile prices and environmental policies. Mining rides commodity cycles and execution risk on projects. But buying into these solid businesses when the market is shaky offers a chance to lock in value.
Bottom line
Buying the dip isn’t about gambling; it’s about choosing strong, cash-generating companies and trusting that markets will bounce. In a TFSA designed for resilience and growth, BNS, CVE, and LUN offer income, value, and future potential. As markets fall, these names could rise again, just as they have many times before.
