TFSA Investors: 4 Undervalued TSX Stocks to Buy Now

Cheap TSX stocks like Toronto-Dominion Bank (TSX:TD)(NYSE:TD) and others are perfect targets for your TFSA today.

Ambrose O'Callaghan ❯

Ambrose O'Callaghan graduated with a BA in Political Science from McMaster University. After that, he jumped into the banking world. He worked from the front line to an investment associate role. After that, he found a way to marry his experience and knowledge in the world of banking and finance to his love and passion for writing. Ambrose is a passionate believer in Warren Buffett's value investing model.

Published July 14, 2022 4:15 pm EDT

The cumulative contribution room in a Tax-Free Savings Account (TFSA) rose to $81,500 in 2022. Investors can expect another solid increase in the coming year. In the meantime, it is worth targeting TSX stocks that are trading in discounted territory in this bear market. Today, I want to look at four of my favourites. Let’s jump in.

Here’s a discounted TSX stock worth snatching up in the middle of July

Finning International (TSX:FTT) is a Vancouver-based company that sells, services, and rents heavy equipment, and power and energy systems in Canada and around the world. Shares of this TSX stock have dropped 23% in 2022 as of mid-morning trading on July 14. That has pushed the stock into negative territory in the year-over-year period.

This company released its first-quarter 2022 results on May 9. Total revenues climbed 22% from the previous year to $2 billion. Meanwhile, adjusted earnings per share jumped 37% year over year to $0.35. This TSX stock currently possesses a favourable price-to-earnings (P/E) ratio of 10. It also offers a quarterly dividend of $0.236 per share. That represents a 3.8% yield.

TFSA investors can still snag top bank stocks at a great value

Canada’s top bank stocks are worth watching in this choppy market environment. TD Bank (TSX:TD)(NYSE:TD) is the second-largest of the Big Six banks by market cap. Shares of TD Bank fell below the $55/share mark during the 2020 market correction. It would go on to more than doubled over the next two years. TFSA investors should be on the lookout for these opportunities right now.

TD Bank delivered adjusted net income of $7.54 billion, or $4.09 per share, in the first six months of fiscal 2022. That said, earning growth slowed significantly in the second quarter. This TSX stock last had an attractive P/E ratio of 9.6. The bank offers a quarterly dividend of $0.89 per share, representing a solid 4.5% yield.

Don’t sleep on this cheap TSX stock in the summer of 2022

Sun Life (TSX:SLF)(NYSE:SLF) is a Toronto-based insurance and financial services provider. The insurance industry is still geared up for strong growth due to the rising middle class in the developing world. This is a great dividend stock to stash in your TFSA. Shares of this TSX stock have plunged 19% so far this year.

The company unveiled its first-quarter 2022 earnings on May 11. Total insurance sales rose to $799 million compared to $730 million in the previous year. Meanwhile, total underlying net income was down marginally in the year-over-year period.

Shares of this TSX stock boast a very favourable P/E ratio of 8.6. It last paid out a quarterly dividend of $0.69 per share, which represents a 4.8% yield.

One more dividend stock to add to your TFSA

Bird Construction (TSX:BDT) is the fourth TSX stock I’d look to snatch up in your TFSA today. This Ontario-based company operates as a generation contractor. Its shares have declined 28% so far in 2022.

In Q1 2022, it posted construction revenue growth of 6.9% to $475 million. Shares of this TSX stock possess an attractive P/E ratio of 8.9. Bird last paid out a monthly distribution of $0.033 per share. That represents a strong 5.5% yield.