Canadian investors looking to give their TFSA portfolio a growth boost may wish to check out some of the battered names that got caught up in the summer downdraft. Undoubtedly, you don’t need to be heavily invested in the tech sector, which has been experiencing a bit of pressure over the past week, to kick your TFSA wealth creation into high gear.
With the TSX Index looking to revisit all-time highs hit earlier this month, perhaps the following on-sale growth gems are worth pursuing before they can correct to the upside after a recent cool-off that I believe was mostly unwarranted.
At this juncture, it makes sense to consider value-conscious growth names, and in this piece, we’ll have a look at two.
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Restaurant Brands International
Restaurant Brands International (TSX:QSR) is the Canadian quick-serve restaurant firm behind Tim Hortons, Burger King, Popeye’s Louisiana Kitchen, and Firehouse Subs. The cash cow of a company has a world of growth ahead of it as it seeks to expand its chains into international markets. By 2028, the firm is looking to open around 7,000 new locations.
That’s an incredibly ambitious plan that could entail considerable earnings and dividend growth. Restaurant Brands isn’t just an international expansion story, however. The firm has really taken steps to invest in the right areas to drive same-store sales growth. As the firm embraces new-age tech to propel its four brands into the digital age, the company may be able to expand upon its margins, all while it hits the accelerator on expansion.
All considered QSR stock is a growth gem that’s 15% off its all-time high hit earlier this year. With the magnitude of growth ahead of it and a modest 14.6 times forward price-to-earnings (P/E) multiple, which makes little sense given QSR’s impressive growth profile, QSR stock stands out as a top pick for any TFSA fund aiming to outgrow the TSX. The bountiful and growthy dividend (3.3% yield right now) is also a nice touch.
Aritzia
Aritzia (TSX:ATZ) is more of an aggressive growth stock for younger TFSA investors who are willing to embrace the big ups and downs. Indeed, many Canadian consumers are likely very familiar with the brand, so it may come as a surprise that the fashionable women’s clothing retailer boasts a $5.1 billion market cap.
Indeed, it’s very much a Canadian retail play. But as time goes on, I believe it will be more of a Canadian and U.S. retail play as Aritzia continues succeeding with its expansion south of the border. Apart from raking in greenbacks, which are faring well versus the loonie, American shoppers really seem to have a newfound affinity for Aritzia attire.
As the company continues expanding south, I’d group ATZ stock as one of the high-growth retail plays that could really surprise the upside. At 25.1 times forward P/E, ATZ stock still seems way too cheap. It’s a relatively young brand in the American market but one that could have disruptive potential. If you’re a TFSA investor looking to build a nest egg over the next 15 years, I’d argue it’s tough to overlook ATZ stock while it’s down nearly 5% from its mid-July high.
