2 Discounted TSX Stocks to Stash in Your TFSA for Decades

Spin Master (TSX:TOY) and Manulife (TSX:MFC)(NYSE:MFC) are great discounted stocks for TFSA investors to buy and hold for decades.

| More on:

Your Tax-Free Savings Account (TFSA) was meant to give everyday Canadians a wealth-creating edge over the long run. While it may seem like a good idea to stash some speculative instruments in the account, it’s worth remembering that any losses in a TFSA can’t be harvested to offset gains elsewhere.

Moreover, too many trades that go right could catch the attention of the Canada Revenue Agency (CRA), who will have no problem doling out a penalty if your trades are deemed as business activities.

So, what’s the best use of your TFSA?

Your best investment ideas. Unfortunately, there’s no one-size-fits-all answer for what qualifies as best. If you’re a younger investor with decades to invest, it may make more sense to place bets on high-growth companies that may be undervalued relative to their long-term growth stories.

And if you’re less comfortable with volatility in today’s frothy stock market that’s a percentage point away from all-time highs, there’s no shame in going big on value stocks.

Here on the TSX Index, there’s no shortage of value. And if you pick your spots carefully, you can set yourself up for a pretty comfortable retirement down the road. As the market rally continues, consider neglected and misunderstood names like Spin Master (TSX:TOY) and Manulife (TSX:MFC)(NYSE:MFC) as top candidates for core holdings in your TFSA.

Spin Master

Spin Master is a Canadian toy company that’s been making major waves in digital games amid the pandemic. The digital segment enjoyed incredibly high triple-digit percentage growth. While lockdowns had a big role to play in the segment’s incredible year-over-year growth, I don’t think the strength will fade once things return to normal again.

Could Spin Master have a new growth driver for the next decade?

That’s the million-dollar question. For now, the digital segment isn’t much of a needle mover. But if the innovative toy company can continue investing heavily in the fast-growing segment, I do think Spin stock could receive a blended multiple from the market, as investors appreciate the firm’s innovative capabilities.

Spin Master is more than just a toymaker; it’s a tech-savvy play that has a lot of growth levers. Whether we’re talking about Spin’s promising pipeline, the growth digital games division, or accretive acquisition opportunities, I think Spin is a growth stock that won’t stay this cheap for very long — not with a potential “Roaring 20s” type of discretionary spending boom that we could be experiencing.

Manulife

Manulife is arguably the most exciting Canadian non-bank financial. The insurer has a front-row seat to the Asian market, which is likely to give much lift to the company’s top- and bottom-line in a post-pandemic environment. While the U.S. segment has dampened any growth coming from Asia over the years, I think the multiple vastly discounts Asia’s influence on Manulife’s numbers moving forward.

The stock trades at 0.8 times sales and just 1.0 times book value. That’s a ridiculously low price to pay for high-growth Asian exposure and the likely windfall of higher rates, which could be in the cards over the next 18 months. Undoubtedly, Manulife has had its fair share of issues amid the COVID-19 pandemic, and the Delta variant could drag shares closer to the $22 level again.

Still, long-term investors should look to be a buyer on such weakness, as it’s tough to find a non-bank financial with a decade-long growth outlook that’s nearly as attractive as Manulife’s.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Spin Master Corp.

More on Investing

Paper Canadian currency of various denominations
Bank Stocks

1 Magnificent Canadian Dividend Stock Down 28% to Buy and Hold for Decades

This top Canadian dividend stock is underperforming its large peers this year, but a turnaround could be on the horizon.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

hand stacks coins
Investing

Secure a Wealthy Future With These 3 Canadian Stocks

These Canadian stocks have the potential to appreciate substantially over time and may also enhance returns through dividend payments.

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

analyze data
Investing

3 Blue-Chip Stocks Every Canadian Should Own

These blue-chip stocks are backed by large-cap companies with well-established businesses, solid fundamentals, and a growing earnings base.

Read more »

dividends grow over time
Stocks for Beginners

The Smartest Growth Stock to Buy With $2,000 Right Now

Do you have $2,000 to invest for the long term? These three TSX stocks have and will continue to deliver…

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Best Stock to Buy Right Now: Enbridge vs TC Energy?

Enbridge and TC Energy rebounded nicely over the past year. Are more gains on the way?

Read more »