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Here Are My Top 5 Undervalued Stocks to Buy Right Now

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Image source: Getty Images

Written by Demetris Afxentiou at The Motley Fool Canada

One of the biggest struggles faced by new investors is determining which stocks to invest in. Fortunately, there’s no shortage of stocks to choose from right now. There’s more than a few undervalued stocks to buy that should be on every investor’s radar.

Here’s a look at five of those stellar undervalued stocks to buy.

#1. BCE

BCE (TSX:BCE) is one of the largest telecoms in Canada. Telecoms are incredibly defensive businesses, offering subscription-based services to customers across Canada. That includes TV, wired, wireless, and internet segments.

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Prospective investors should note that the latter two have become increasingly defensive since the pandemic started. Investors should note that BCE also operates a large media business that provides a complementary revenue stream.

Turning to dividends, BCE is a true gem, paying out dividends for over a century. It’s also provided annual increases for over a decade. The most recent uptick was a 3.1% increase, bringing the payout to $3.99 per share.

BCE’s stock price has dropped nearly 40% in the past two years. Given its defensive business and juicy income, that makes BCE one of the undervalued stocks to buy now.

#2. TD Bank

Toronto-Dominion Bank (TSX:TD) is another one of the great undervalued stocks to buy right now. TD is the second largest of Canada’s big banks, with a massive branch network in Canada and in the U.S.

Interestingly, TD’s U.S. network is larger by number than its Canadian footprint. That U.S. network stretches from Maine to Florida. Volatile markets have helped push TD (and its peers) down to discounted levels.

As of the time of writing, TD trades down 16% over the trailing two-year period. That discount also means that TD’s stellar quarterly dividend has swelled and currently earns a juicy 5.21% yield.

This fact alone makes TD a great buy-and-forget option for income and growth-focused investors.

#3. Canadian Tire

Canadian Tire (TSX:CTC.A) is one of the best-known retail stocks in Canada. Apart from its namesake brand, Canadian Tire also includes a growing number of brands, including Mark’s, Party City, SportChek, and others.

Canadian Tire is unique among other retailers. It has strong growth potential, is expanding in all the right ways, and offers a juicy dividend.

Oh, and let’s not forget the reason why Canadian Tire is one of the undervalued stocks to buy now. As of the time of writing, the stock trades down 30% over the trailing two years.

That dip came at a unique time while the company was investing in growth. That drop also pushed the quarterly yield up to 5.48%, making it one of the better-paying options on the market.

Prospective investors should keep in mind that Canadian Tire runs a profitable, growing business that is weighed down by the overall market right now. This means that when conditions improve, Canadian Tire’s stock will recover.

#4. Enbridge

There are many reasons for investors to consider Enbridge (TSX:ENB). Not only does the energy infrastructure giant operate a hugely defensive pipeline network, but it also has its tentacles in the growing area of renewables.

Enbridge also operates the largest natural gas utility on the continent, which provides yet another defensive source of revenue.

And despite all that potential, Enbridge trades down nearly 20% over the past two years.

Enbridge also pays investors a quarterly dividend with an insane 7.78% yield right now. For three decades, Enbridge has also provided investors with annual upticks.

#5. Cargojet

Cargojet (TSX:CJT) is another one of the undervalued stocks to buy now. Cargojet boasts a whopping 90% of the domestic Canadian overnight air freight market in Canada. It also has international hubs and agreements in place with e-commerce titans.

As the market has cooled this year, so too has Cargojet’s stock. As of the time of writing, the stock has traded down 31% over the past two years. This factor alone makes it a great option to consider buying now for that eventual recovery.

The post Here Are My Top 5 Undervalued Stocks to Buy Right Now appeared first on The Motley Fool Canada.

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Fool contributor Demetris Afxentiou has positions in BCE, Enbridge, and Toronto-Dominion Bank. The Motley Fool has positions in and recommends Cargojet. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

2024