TFSA Investors: 1 Top Non-Bank Financial Stock That Looks Dirt Cheap

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TFSA (tax-free savings account) investors should consider the Canadian financial landscape if they expect historically inflated dividend income. cheap multiples. In reality, finances don’t fare well when a recession hits.

2022 is the year 2023 is already priced into the recession. In fact, we have heard pundits now talking about a decline in many areas. Almost everyone expects a drop in income in the new year. Don’t be surprised if the stock market actually does decent this year, even if the economy takes a few more steps back, with analyst estimates downgraded anew!

Remember that the stock market is not the economy. The market is looking at where the economy will go next. Like Wayne Gretzky, they think the markets and their participants are more concerned with where the buck is going next than where the buck is going at any given time.

2023 will be a good year for non-banking funds

Over the past year, markets have been hit by impending pain. In 2023, we’ll get a glimpse of just how much fear is needed. Perhaps 2022 was more feared; Probably not enough. At the moment, the fog of uncertainty is causing investors to sell first and ask questions later.

In fact, it’s an interesting time to be an investor as we see the first quarter of 2023 sliding on thin ice.

This time, I think TFSA Investors should play both sides of the coin. Although the front could easily be more negative, it seems to be “late in the game”. In fact, going against conventional wisdom indicates that investors are starting to get a bit bullish, while others fear the bear for the rest of the year.

While I’m not too excited about the 2023 bounce-back, I see financials (beyond banks) as intriguing value options. Even if banks oblige, the following financial stocks may have deep value:

goeasy: Take it easy on this crushed dividend stock

Slim (TSX:GSY) is an alternative lender that flourished in 2021 when the BNPL (Buy Now; Pay Later) trend was hot. Year to date, shares are down 40%. From its peak, the stock is up more than 50%. It’s a painful decline for the consumer lender. Consumer spending will hit a roadblock when Canadians begin to reduce their accumulated debt in 2021, when the recession hits.

Indeed, monetary policy has eased into 2022, with relentless rate hikes putting further pressure on those consumers. Fortunately, I think there is more damage in the name. Shares trade at 11.15 times earnings. Also, a “mild” recession (as most expect) could result in less revenue erosion for consumer-focused plays.

With a dividend yield of 3.4%, goeasy makes a risky but compelling economic recovery play. However, it may be too early to play it at a much larger level. As such, I will gradually buy on further weakness.

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