Yahoo Finance RRSP and TFSA Prep: Get Ahead of a Downturn With These 3 Stocks
Written by Amy Legate-Wolfe at The Motley Fool Canada
It might be hard to put cash aside right now. The market is not doing well, and we’re set up for a bad summer with a recession coming in. But here’s the thing, by the end of the year, the market could be doing quite well! And what’s more, you’ll have to play catchup by this time to meet your contribution limits for both your Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TSFA).
So, don’t wait. You can instead drip feed into these plans over the next year by making automated contributions. It doesn’t have to be a lot, but anything is better than nothing. And it will certainly sting less than having to do it all at once down the line.
To help you prepare, here are three top TSX stocks that I would recommend — each doing quite well in the first few months of 2023 and set up for more to come.
Bombardier
Since making the shift away from its many investments to focus on business jets, Bombardier (TSX:BBD.B) has proven it made the right move. It managed to come out of the pandemic quite strong and continues to see its aircrafts in high demand.
Now, Bombardier stock trades up 27% year to date! Yet it continues to be of value, trading at just 15 times earnings as of writing. And that’s likely to continue improving, as the company continues to have a backlog of business aircrafts to make. In fact, it’s making a facility to make even more in Toronto.
With faster growth and lower debt on the books, it looks like Bombardier stock should continue to climb at least through 2023. And this could therefore be a strong choice for your RRSP and TFSA TSX stocks.
Martinrea
Another TSX stock doing well right now is Martinrea International (TSX:MRE). The diversified global automotive supplier continues to be in high demand among vehicle manufacturers, which includes the systems that make up the basics of every automobile from fuel systems to power steering.
Shares of Martinrea stock are now up 27% year to date alone yet trade at just 8.42 times earnings as of writing. So, there’s still time to get in on the value associated with this stock for your TFSA or RRSP. What’s more, it offers a dividend yield at 1.43% as well. It’s not enormous but a nice bonus of passive income.
With many estimate-beating earnings reports under its belt and a large backlog and strong future outlook, Martinrea is another solid choice for investors as well in 2023.
Uni-Select
I’m sensing a theme, but it looks like if you build it, they will come. And that’s exactly what’s happening for Uni-Select (TSX:UNS) as well. While Martinrea stock creates parts, Uni-Select finishes it off, providing auto parts with the paint and related products for motor vehicles.
Shares are up about 10% year to date as of writing, yet there was major news that caused a surge recently. Uni-Select is set to be acquired for US$2.1 billion by LKQ to “strengthen prospects,” according to a statement. The integration gives the company more diversification, but for low risk and integration costs.
So, I would certainly consider picking up this stock before it climbs further after this acquisition news. Then you may be in for another surge in share price, as the company heads towards a recession-fueled summer.
The post RRSP and TFSA Prep: Get Ahead of a Downturn With These 3 Stocks appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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