Investors always want a deal, and they should! But what exactly makes a stock a deal? While some look simply at penny stocks or even meme stocks for high growth. Here at the Motley Fool Canada, we like digging into the data. A share price could be in the triple digits or under a dollar; it doesn’t matter. What it comes down to is the future stability of the company for growth and returns when looking for cheap stocks.
So, here are two cheap stocks that I would buy even with just $500.
Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) is the stock to own, as clean energy continues to receive investment. Over the next decade, analysts predict US$10 trillion in investment around the world in clean energy. Governments and private companies alike are committing to lower carbon emissions. And Brookfield will continue to be one of the best investments for those entities to make.
Last year was incredibly profitable for the company, yet it remains a cheap stock thanks to a pullback in the market. Brookfield generated funds from operations (FFO) of $242 million, up 21% from the last year. It signed 29 agreements for a further 2,300 GWh of renewable generations. It also invested or agreed to invest $1.6 billion of equity across a diverse range of renewable energy assets around the world. Yet it still has almost a billion in cash on hand for further investment.
As the company continues to expand, this is one of the cheap stocks you’ll want to hang onto. It offers investors a dividend yield of 2.53% as of writing and 41% share growth in the last year. But in the last two decades, shares are up 2,369% for a compound annual growth rate of 17.38%! Yet it continues to trade a 2.2 times book value. So, as the world continues to invest in clean energy, this is definitely a company you’ll want to have in your Motley Fool Canada portfolio.
The pandemic left a lot of businesses struggling, and Alimentation Couche-Tard (TSX:ATD.B) was no exception. The company lost a lot of revenue with the lack of customers going into its brick-and-mortar locations. There simply weren’t commuters or travellers seeking out the company’s Circle K locations. But that’s exactly why this is one of the cheap stocks to buy.
That didn’t stop the company from seeing the downturn as an opportunity. Alimentation has been expanding at a rapid pace, investing in locations around the world. It no longer is just a North American operation, but a global one. This will provide a diverse stream of revenue for shareholders, which is excellent to have during any economic downturn.
Although COVID-19 continues to impact the company, it continues to have a strong balance sheet. That’s what we like to see at Motley Fool Canada. During its latest earnings report, the company saw adjusted net earnings of $622 million, up 7% from the year before. Total merchandise and service revenue also rose by 5.6% to $4.5 billion.
While fuel volume decreased by 19.9% in Canada, 15.7% in the U.S., and 10.3% in Europe, this should all rebound now that COVID-19 is getting under control. The oil and gas demand is booming, so this should be a heavy revenue stream in the future.
The company also completed the acquisition of Convenience Retail Asia for $381.2 million during the last quarter. It also renewed its share repurchase program totalling $897.9 million. And even with a strong cash position of $5.3 billion, it recently sold 355 locations for more cash on hand. With its next earnings around the corner on June 30, investors should buy cheap stocks like this now before a jump from more good news.
The post Have $500? 2 Absurdly Cheap Stocks That Long-Term Investors Should Buy Right Now appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe owns shares of Brookfield Renewable Partners LP. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC.