Only the best-in-breed Canadian stocks are worth holding in your Tax-Free Savings Account (TFSA). And in this piece, we’ll look at some of the most enticing Canadian firms whose shares, I believe, are trading at way too discounted a multiple. While the TSX Index is blasting off to new highs, with a S&P 500-beating gain for 2025 seemingly in the bag as the index runs into the final month of the year, investors should gravitate towards well-run businesses with valuation metrics that may still be underappreciated by this market.
The TSX Index’s momentum may suggest there’s not much value out there, but there is, and depending on where you look, there might be deep value to be had.
Here are timely names atop my TFSA radar ahead of the holidays.
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Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) gained close to 9% last week, thanks in part to some exceptional quarterly earnings results. Undoubtedly, earnings growth is back on track, thanks in part to meal deals and liquor sales. In a prior piece where I pounded the table on shares of ATD, citing them as a great value bet, I mentioned such ready-made food products as a tailwind that would be key to driving earnings growth from here.
As it turned out, the food tailwind kicked in a lot sooner than expected, with Couche-Tard’s second quarter of fiscal year 2026 coming in hotter than analysts expected. I think there’s more strength to be had, especially when you consider the Guy Fieri-inspired menu rollout could take the food tailwind to new levels in the new year.
The food program has been a hit success, and the best part is that it’s just getting started. As Couche-Tard looks to open a multitude of new stores in the coming years, likely in prime areas, I think Couche-Tard might have the keys to thrive even in an environment where the consumer is under considerable pressure. Perhaps Couche-Tard is the growth staple that can do well in all sorts of consumer climates. If the food is good, the prices are low, and the convenience is there, Couche-Tard may very well be the ultimate value play.
While you will pay a premium for most goods at the convenience store, I think Couche-Tard has done a fantastic job of finding a pricing that allows value-conscious customers to keep coming back. If the ready-made food quality and pricing keep beckoning in shoppers, I find Couche-Tard to be a strong pick-up after its latest post-earnings pop. Once Couche-Tard gets active on mergers and acquisitions, I’ll get even more excited about a name that might be overdue for a move to new highs.
With management stating that they expected “some acquisitions” to potentially be announced “in the coming quarters,” I think Couche-Tard’s stage is set for a nice run that extends through 2026.
TC Energy
TC Energy (TSX:TRP) is up a modest 11% year to date and seems like a great bet for the income seekers, while the yield is at 4.5%. Though the stock recently got downgraded over valuation concerns compared to its pipeline rivals, I’d be more inclined to stay the course with the name since I think it deserves such a premium for its stellar management team. Undoubtedly, the latest guidance increase is a big deal that warrants a heated move in the stock.
And while I do wish shares were cheaper, I’m not against nibbling into a partial position here as one seeks to add on a pullback. The dividend is on solid ground, and it’s positioned to grow as cash flows do. Though TRP shares could be cheaper, I view them as worth a premium price tag in this environment. Perhaps the $70 support level could be an area to watch for in the coming months for those keen on the midstream energy firm as it rolls ahead.
