The Tax-Free Savings Account (TFSA) is a popular registered account among Canadians. Launched in 2009, the TFSA encourages savings and investments, as any withdrawal from the account is exempt from Canada Revenue Agency taxes.
Canadians can hold several asset classes in a TFSA that include stocks, bonds, and mutual funds. Investors can also buy and hold equities from exchanges south of the border, to further diversify their portfolio.
Here, we look at two U.S. stocks that I believe should be a part of your TFSA portfolio in 2022.
Green Thumb Industries
The first stock on my list is Green Thumb Industries (CNSX:GTII), a U.S.-based cannabis producer valued at a market cap of US$3 billion. Headquartered in Chicago, Illinois, Green Thumb has 17 manufacturing facilities and 77 retail locations across 15 states in the U.S.
The company manufactures and distributes a portfolio of branded cannabis products. It also owns and operates a chain of retail cannabis stores called RISE, which is fast gaining traction across the country.
Due to the recent wave of legalization in the U.S., Green Thumb has managed to increase sales from US$62.5 million in 2018 to US$893.56 million in 2021. In Q2, its sales rose by 14.6% year-over-year to US$254.3 million. It has now reported eight consecutive quarters of positive GAAP (generally accepted accounting principles) net income which stood at US$24.4 million or US$0.10 per diluted share in the June quarter.
Green Thumb’s adjusted operating EBITDA (earnings before interest, tax, depreciation, and amortization) rose 17.4% to US$78.7 million in Q2, accounting for 31% of sales. In the first six months of 2022, its operating cash flow stood at US$40 million.
Analysts also expect company sales to touch US$1.6 billion in 2023, valuing the stock at a forward price to sales multiple of 2.
Green Thumb stock is down 73% from all-time highs. But its now trading at a discount of 170% compared to consensus price target estimates. Now would be a good time to consider Green Thumb stock.
The Trade Desk
One of the largest players in the programmatic advertising segment, The Trade Desk (NASDAQ:TTD) is a solid long-term bet. Down 50% from all-time highs, TTD’s stock price has still surged 1,700% since its IPO in 2016.
Several tech giants such as Meta Platforms, Snap, and Twitter reported revenue and earnings below consensus estimates in Q2 due to a challenging macro-economic environment. However, The Trade Desk’s sales rose 35% year-over-year in Q2 to US$377 million while adjusted earnings surged 11% to US$0.20 per share. Analysts forecast sales and EPS (earnings per share) at US$365 million and US$0.20 per share, respectively.
TTD’s co-founder and CEO Jeff Green commented that the company’s stellar performance in Q2 provides the management team with confidence in gaining market share across economic cycles. It also continues to invest in verticals such as identity, connected TV, retail media, and supply chain optimization.
The Trade Desk has signed several partnerships with the world’s leading broadcasters, retailers, and publishers which should drive future revenue growth.
TTD now expects revenue of US$385 million and adjusted EBITDA of US$140 million in Q3. Analysts tracking TTD stock, forecast sales to touch US$382.2 million in the September quarter.
Due to the recent sell-off, TTD stock price is trading at a discount of almost 50% compared to consensus price target estimates. Considering its future growth potential, this stock offers a great opportunity to diversify your TFSA portfolio.
