By Puja Tayal at The Motley Fool Canada
Amidst global market uncertainty, investors are looking for safe-haven TSX stocks that can give stable returns. While hyped stocks often warrant caution, they also present avenues for short-term growth – evidenced by those who missed Nvidia’s AI surge in 2024 by staying on the sidelines. The market is in a correction mode this month after the US-Israel-Iran war began, but oil stocks are rallying, creating an opportunity to buy an assured rally. These dynamics make Tax-Free Savings Accounts (TFSA) the perfect vehicle for tapping into tax-free growth and income.
Oil stocks: The trendsetters of 2026
The year 2026 is a year of oil stocks, with US President Donald Trump targeting the trade of world oil reserves in US dollars. In January, the US targeted Venezuela, which has the world’s largest oil reserves, and then Iran, which stands third after Saudi Arabia. And next on the radar are Cuba and Greenland. At the center of geopolitical escalations is oil and its price is not falling anytime soon.
Among the top nine countries with the largest oil reserves, eight are involved in war. This gives Canada an opportunity to offer a peaceful oil supply.
| Rank | Countries with the highest oil reserves | World Share |
| 1 | Venezuela | 17.2% |
| 2 | Saudi Arabia | 15.1% |
| 3 | Iran | 11.8% |
| 4 | Canada | 9.2% |
| 5 | Iraq | 8.2% |
| 6 | United Arab Emirates | 6.4% |
| 7 | Kuwait | 5.8% |
| 8 | United States | 4.7% |
| 9 | Russia | 4.5% |
Source: Worldometer
Freehold Royalties: A prime TFSA stock for monthly, tax-free income
Freehold Royalties (TSX:FRU) stands out as a vital beneficiary of the current oil supply disruptions, without the accompanying risks. The company’s share price is rising on the back of increasing oil prices, which have touched close to US$90/barrel. Like February 2022, it is shock all over again, but on a much larger scale. Because this time, the United States is in a war with Iran via Israel, and both countries have higher oil reserves than Russia.
When geopolitical conditions are tense, the reserves become inaccessible to the importing countries. With oil refineries being destroyed, restoration could take a while. This could shift the demand to the United States and Canada, where oil refineries are intact, and they have ample oil reserves to export.
Freehold Properties has one of the largest non-government portfolios of oil and natural gas royalties in Canada, with a sizeable land base in the U.S. It owns the land and leases it to oil-producing companies, like ConocoPhillips and ExxonMobil.
The company doesn’t bear the cost of developing and operating oil wells. All the operational risk is borne by oil producers. Freehold reaps the benefit through royalty fees, increasing in tandem with oil prices and production volumes. Such a model positions Freehold perfectly to capitalize on oil price surges and exports with minimal risk.
The company keeps buying new reserves while keeping net debt below the target range of 1.5 times its funds from operations. It can sustain its current dividends of $0.09/month when the oil price is US$50/barrel. The doubling of the oil price could bring windfall gains to Freehold in the first quarter of 2026.
Your TFSA can make $90 in monthly, tax-free income
You can hop onto the oil trend and hedge your portfolio from market uncertainty with Freehold Properties. The company is at a sweet spot to sustain the $0.09 per month dividend it distributes from royalties. If there are windfall gains, it could use them to buy more reserves, reduce debt, and pay special dividends.
Consider buying 1,000 shares of Freehold throughout the year, without worrying about the dip and rally. If you buy them now at their peak, it will cost you $17,700. By committing to a $500 monthly investment, you can leverage dollar-cost averaging instead of trying to time market highs or lows. In 2022, the shares ranged between $12–$17, emphasizing the value of spreading your investment. It is difficult to say whether the current market price is the lowest or the highest range for this stock. Buying small amounts will help you benefit in either case.
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The post Your TFSA Can Make $90 in Monthly, Tax-Free Income appeared first on The Motley Fool Canada.
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Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Freehold Royalties and Nvidia. The Motley Fool has a disclosure policy.
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