TFSA Stocks: 4 TSX Companies to Buy in the Market Crash
Canada has some great publicly traded companies. However, not all TSX companies are as good as each other. And if you’re buying shares for a Tax-Free Savings Account (TFSA) you’ll know that those names have to be reliable. That’s why it pays to do a quality check on any stock you plan to own. Today we’ll take a look at some of the best stocks to buy for your TFSA in 2020.
Contrarian plays and TFSA stocks
Investors have been seeking out blue-chip bargains, like airline companies and beaten-up energy names. Enbridge is a healthy, robust value play for the long-term, but the oil sector is reeling.
Meanwhile, Air Canada is laying off 16,000 temporarily to offset a drop in traveller demand. Both names support a value/contrarian strategy, therefore. Both could also bring long-term value to a TFSA.
Bombardier is an event-driven stock — and the last couple of months have been full of events. The start of the year saw the oil price war rumble on, and a real war almost ignited in the Middle East. Now Bombardier is putting the kibosh on operations amid COVID-19 fears and signs of a recessionary market.
The aerospace behemoth saw its share price rocket 12% on news of its rail divestment. Investors were finally being given what they wanted from Bombardier – focus. Indeed, this radical act of streamlining is one of the main reasons why contrarians may want to buy this name for a TFSA.
Value investors also have reason enough to get invested. The stock has lost 84% in the last 12 months. Its downward trajectory has been especially steep lately, though. Bombardier nosedived 77% in the last three months. The billion-dollar aircraft and business jet company could hit the bottom soon.
A safe play for a TFSA
Perhaps you want to side-step currently shunned industries. A low risk TFSA stock should be resilient to market forces, after all. BCE has emerged as a major stock for quarantine upside. This name has social distancing written all over it. From wireless coms to TV entertainment, BCE is a strong buy for the coronavirus market.
BCE is one of the biggest blue-chip names for communications exposure. It combines wireless, broadband, television, and Internet services – a must-have for investors seeking safe TFSA stocks right now.
Around 10 million Canadians feed revenue into its wireless business. That’s a huge market share, making BCE a strong wide-moat buy.
Further, BCE is also the legacy phone provider for most of Eastern Canada. For TFSA investors eyeing social distancing stocks, BCE is also a strong pick for TV, radio, and media exposure.
For instance, BCE holds the Canadian reins to Showtime, Starz, and HBO. Overall, BCE is nicely diversified, with a wireline and wireless to media EBITDA ratio of about 90:10.
The bottom line
Pundits are traditionally bearish on Bombardier, but for contrarian investors it could be a profitable TFSA side bet. Enbridge and Air Canada are stronger buys for an eventual market recovery.
Meanwhile, BCE is a low risk, wide-moat buy for any Canadian stock portfolio.
The post TFSA Stocks: 4 TSX Companies to Buy in the Market Crash appeared first on The Motley Fool Canada.
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Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.
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