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TFSA: 3 Reliable Stocks You Can Buy at a Discount

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Written by Daniel Da Costa at The Motley Fool Canada

As investors, naturally, we are always looking for high-potential stocks to buy while they trade at a discount. The issue is that the stocks that offer some of the largest and most compelling discounts are often the ones that are being heavily impacted by the economic environment, making them much higher-risk investments.

When it comes to investing in your Tax-Free Savings Account (TFSA), it’s certainly important that you find top-notch stocks that can grow your capital significantly. After all, you’re trying to take advantage of the tax-free nature of the TFSA.

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At the same time, though, you don’t want to invest in super high-risk stocks where you could potentially lose a significant amount of capital you invested in addition to the valuable TFSA contribution room.

With that in mind, if you’re looking for high-quality stocks that you can buy at a discount today for your TFSA, here are three of the best to consider.

A top utility stock to buy now while it’s trading undervalued

There’s no question that one of the safest and most reliable stocks in Canada is Fortis (TSX:FTS), the massive utility stock.

Not only are utility stocks well-known to be highly defensive and recession-resistant thanks to the essential services they provide, but Fortis also has a lengthy, decades-long track record demonstrating exactly why it’s one of the best and most reliable stocks on the TSX.

For 50 straight years, Fortis has not only paid a dividend, but it has also increased the cash it pays out to investors every single year.

That just goes to show not only how impressive Fortis’s management has been but also how reliable the stock is and the fact that whether the economy is booming or in a recession, Fortis’s operations are consistently expanding, and it’s constantly generating more cash to return to investors.

Plus, after several interest rate increases in quick succession over the last few years, Fortis stock is now trading off its highs. So, while you can buy this top stock at a discount and lock in a higher-than-normal yield, it’s certainly one of the most reliable Canadian stocks to consider for your TFSA.

A top Canadian REIT with significant long-term growth potential

Many real estate stocks are high-quality and reliable investments, especially since they’re constantly generating tonnes of cash flow each month. While residential real estate investment trusts (REITs) are often the top choice for investors, one of the best REITs you can buy for your TFSA at a discount today is Granite REIT (TSX:GRT.UN).

Granite is an industrial REIT that owns properties like warehouses and distribution centres. That may not sound like the most exciting business, but in recent years, industrial REITs have gained a tonne of potential.

For example, as e-commerce continues to boom, many businesses are closing some of their retail stores in lieu of their online platforms. However, all that inventory still needs to be stored somewhere. As companies close some of their brick-and-mortar locations, demand for warehouse space has been consistently rising.

With many economic headwinds and uncertainty today, though, Granite now trades well off its highs, offering an attractive discount and making it one of the best to buy.

Not only is it down 25% from its all-time high reached back in 2021, but its yield has also climbed to roughly 4.5%, giving investors a significant opportunity today.

A top telecom stock to buy and hold for years

In addition to utility stocks and real estate a top telecom stock like BCE (TSX:BCE), is another high-quality investment that investors can buy for their TFSAs today.

Telecommunications is an industry that has quickly become essential, giving BCE a tonne of resiliency. In addition, though, telecom stocks also own plenty of long-life assets that can generate considerable cash flow for years to come.

In recent years BCE has been spending a tonne of cash to build out both its 5G infrastructure and fibre-to-the-home services. And while building out this infrastructure is essential to keep BCE competitive, these investments should also drive considerable cash flow growth for years to come.

Therefore, while BCE trades 23% off its high and offers a yield of roughly 7.9%, it’s certainly one of the best stocks to buy for your TFSA today.

The post TFSA: 3 Reliable Stocks You Can Buy at a Discount appeared first on The Motley Fool Canada.

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Fool contributor Daniel Da Costa has positions in Bce. The Motley Fool recommends Fortis and Granite Real Estate Investment Trust. The Motley Fool has a disclosure policy.

2024