Only the best Canadian stocks are worth keeping in your Tax Free Savings Account (TFSA). And in this piece, we’ll look at some of the most attractive Canadian companies whose shares are, in my opinion, trading at far too low a price. As the TSX index shoots to new highs, with earnings set to surpass the S&P 500’s 2025 earnings as the index enters the final month of the year, investors should focus on well-managed companies with valuation metrics that may still be undervalued by this market.
The momentum of the TSX Index may indicate that there isn’t much value, but there is, and depending on where you look, there could be a lot of value to be had.
Here are current names on top of my TFSA radar ahead of the holidays.
Food Couche-Tard
Food Couche-Tard (TSX:ATD) rose nearly 9% last week, thanks in part to some exceptional quarterly earnings results. Earnings growth is undoubtedly back on track, thanks in part to meal deals and spirits sales. In an earlier piece where I attacked ATD shares and called them a good bet, I mentioned convenience food products as a tailwind that would be key to driving earnings growth from here.
As it turns out, the food tailwinds kicked in much earlier than expected, with Couche-Tard’s second quarter of fiscal 2026 turning out warmer than analysts expected. I think there’s more momentum to be had, especially when you consider that the Guy Fieri-inspired menu rollout could take the food wind to a new level in the new year.
The food program has been a great success, and the best part is that it is just getting started. As Couche-Tard looks to open a large number of new stores in the coming years, likely in prime areas, I think Couche-Tard may well have the keys to thrive, even in an environment where consumers are under significant pressure. Perhaps Couche-Tard is the growth product that can do well in a variety of consumer climates. If the food is good, the prices are low and the convenience is there, Couche-Tard could very well be the ultimate value play.
While you pay a premium for most goods at the grocery store, I think Couche-Tard has done a fantastic job of finding a price point that will keep value-conscious customers coming back. If the quality and price of prepared foods continue to beckon shoppers, I think Couche-Tard is a strong improvement from its latest post-earnings numbers. Once Couche-Tard becomes active in the M&A space, I’ll be even more excited about a name that may be overdue for a move to new heights.
With management saying they expect “some acquisitions” to possibly be announced “in the coming quarters,” I think Couche-Tard is poised for a nice run stretching through 2026.
TC Energy
TC Energy (TSX:TRP) is up a modest 11% year to date and looks like a good bet for income seekers, while yielding 4.5%. While the stock has recently been downgraded due to valuation concerns compared to its pipeline rivals, I’d be more inclined to stay the course with the name as I think it deserves such a premium for its great management team. Undoubtedly, the latest guidance increase is a big deal that warrants a heated move in the stock.
And while I wish shares were cheaper, I’m not opposed to taking a partial position here as they try to add a pullback. The dividend is on a solid foundation and positioned to grow as the cash flows do. While TRP shares could be cheaper, I view them as having a premium price tag in this environment. Perhaps the $70 support level could be an area to watch in the coming months for those interested in the midstream energy company as it continues to develop.
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