TFSA Dividends: 2 Bargains to Buy on the Dip

TFSA (Tax-Free Savings Account) investors should not wait until the next market correction before buying stocks. In fact, there are bargains in the market in any kind of environment. As valuations improve, mostly within the technology sector, investors may want to reconsider many of the names left in the strong first half of 2023. Undoubtedly, many stocks are not quickly developing like some hyped-up artificial. Intelligence (AI) games are made!

Although a market correction could hit at any time (we may be overdue for one), TFSA investors don’t have to stand around, waiting for a 10% drop in the broader averages before moving. Personally, I would look to buy value stocks if they are at a price below your estimate of their value.

Remember, even if the broad stock market is a little on the bubble side after a glorious run, that doesn’t mean everything is untouched or at risk of a severe selloff.

Stocks may move in unison when volatility increases, but it doesn’t always have to. Usually, the biggest, hottest winners tend to be the ones that give up the most returns as the selloff gets underway. wonder if those names hold their own in the face of the next inevitable market pullback.

Undoubtedly, some stocks have the band-aid taken off sooner than others. And in this regard, we’ll look at two TFSA-worthy dividend stocks that I think made for compulsive buying in the recent weakness.

Suncor Energy

Suncor Energy (TSX:SU) and the broader basket of energy stocks have lost their luster in recent months after outperforming in 2022. Undoubtedly, the tables have turned in a major way today year. And you can be sure that they will come back again in due time. While I have no idea when energy will lead again, I think the valuation of names like Suncor is a little on the cheap side.

Even if oil does not increase from here (WTI, or West Texas Intermediate, prices have settled around the US $ 70-per-barrel mark), Suncor stock will be a great investment, thanks to the dividend. Suncor’s dividend yield is 5.47% as of writing. After the nearly 27% pullback to the 2022 high, I would argue that SU stock should be saved from the next market-wide pullback, which could be led by various tech names.

Natural Resources Canada

Natural Resources Canada (TSX:CNQ) is another large-cap energy play that is doing very well. Like the rest of the energy patch, the parts are from their high. As of writing, CNQ shares are down just north of 11% from their high. At about 8.9 times trailing price earnings (9.2 times forward), the stock seems like a good value option for those looking for prime exposure to the energy patch.

With a 4.94% dividend yield, CNQ stock is also a great income play for TFSA investors looking for potential and substantial passive income.

The better buy for TFSA investors: Suncor or CNQ?

I like Suncor better this time, mostly because of the slightly higher dividend yield and slightly lower price of admission.