The economy is slowly rebounding, with the TSX trading reaching all-time highs nowadays. This abrupt surge also meant the rise of cheap Canadian stocks you can buy that are traded cheap and are offered with good growth. However, as the Canadian stock market stays true north, strong, and fierce, multiple stocks are trading now at stretched valuations despite the strong buying in the stock market.
Today, Motley Fool investors are on the vigilant hunt for the cheapest Canadian stocks to buy (not necessarily penny stocks). But how do we classify a “cheap” stock? Does it imply that a company, amidst solid fundamentals, has a share price that doesn’t reflect past or future stock performances? On the TSX today, plenty of these companies make themselves viable for investors to consider. We have gathered some of these cheap Canadian stocks you can buy, which are perfect for Motley Fool investors searching for their quick rise on the TSX today!
Cheap (Undervalued) Stocks for Canadians
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Aecon
Fast Facts:
TSX: ARE
Shares Trade: 17.31 CAD
P/E Ratio: 14.46
EV/EBITDA: 12
Dividend Yield: 3.2%
Aecon Group is part of the construction industry which remains at the top of that list and a company to watch out for in the future. They have backlog projects worth $6.5B but continue to have projects added to their roster. As well, 25% of their revenue came in during the latest quarter, with 6.9% adjusted EBITDA yearly. With the economy’s continuous recovery, one major priority will be construction, so missing it on TSX today would be an honest regret.
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Algonquin Power & Utilities
Fast Facts:
TSX: AQN
Shares Trade: 17.77 CAD
P/E Ratio: 22.27
EV/EBITDA: 18.5
Dividend Yield: 4.2%
Algonquin Power & Utilities is a solid bet of a company for investors who seek growth and income. This utility company has delivered consistent and stellar earnings, with higher cash flows on the back of their contractual framework and rate-regulated assets. Furthermore, it has a rate base projection at a double-digit rate for the next five years, implying consistent earnings growth in the coming years. Because of its solid earnings and cash flows, Algonquin Power & Utilities increased its dividend at a 10% compound annual growth rate for the past 11 years.
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Aurinia Pharmaceuticals
Fast Facts:
TSX: AUP
Shares Trade: 31.98 USD
P/E Ratio: 14.46
EV/EBITDA: 12
Dividend Yield: 3.2%
Aurinia Pharmaceuticals is a pharmaceutical company that has upped its production of oral therapy drugs for lupus nephritis. With their revenue already increasing, analysts believe that the company is on its way to a significant share boost. As of writing, analysts currently believe that Aurinia Pharmaceuticals have a 120% average potential upside. So, this time might be the best to jump on and buy this Canadian stock before a boost for Motley Fool investors out there.
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AutoCanada
Fast Facts:
TSX: ACQ
Shares Trade: 47.16 CAD
P/E Ratio: 10.78
EV/EBITDA: 13.37
Dividend Yield: 3.31%
Recently, analysts said that AutoCanada reported solid earnings and a continued solid and balanced sheet. This consistency allowed them plenty of target acquisition and growth room in the auto industry. As a result, they have reported revenue on the TSX today almost doubled to $1.3B. This amount resulted from used vehicle sales and finance and insurance, having 80% financed vehicles from the total sold. A jump of 59% in total vehicle sales yearly and 84% in used vehicles were seen noticeably.
But their most impressive feat was their EBITDA – $70.5M – a 1,369% enormous increase from the previous year! This remarkable event and its earnings destroyed all estimates and with shares climbing to all-time highs. In addition, as of writing, they have an average of 49% potential upside.
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Bank of Montreal
Fast Facts:
TSX: BMO
Shares Trade: 137.69 CAD
P/E Ratio: 14.52
EV/EBITDA: 13.37
Dividend Yield: 3.29%
Although not as large as those of the Big Six Banks, the Bank of Montreal, or BMO, is still garnering much attention from solid earnings. BMO was at par with a financial institution that has been way ahead of its peers consistently, having all of its operating segments beating estimates. With a $3.44 adjusted EPS, BMO was well above the $2.93 consensus. As a result, BMO has become a Canadian stock to buy now, perfect for long-term investors.
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Cameco
Fast Facts:
TSX: CCO
Shares Trade: 26.99 USD
P/E Ratio: 61.1
EV/EBITDA: 77.71
Dividend Yield: 0.25%
Although Cameco is a great company, be cautious as of the moment, Motley Fool investors. Cameco stocks may seem to be the next company endeared by WallStreetBets, and could indeed result in a short squeeze any time soon. That being said, the best uranium stocks on the TSX are set for a future of explosion in terms of renewable energy. President Joe Biden himself stated he would seek existing reactors towards the movement of a clean economy. Cameco stock shares are up to 86% year to date. However, it is overbought at an RSI of 89.75. Right now, no way is known how to calculate value because of the rapid share growth. So, please proceed with caution and look out for tips in buying when it comes down to earth.
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Dream REIT
Fast Facts:
TSX: D.UN
Shares Trade: 17.39 CAD
P/E Ratio: 12.84
EV/EBITDA: 13.37
Dividend Yield: 4.44%
Post-pandemic, Dream Office REIT is a substantial investment these days. The company has shown revenue to rise with companies beginning to go back into their temporarily abandoned offices. With its focus on downtown Toronto, this news could be massive, especially for investors searching for even short-term boosts. Then again, Dream REIT is one of the stocks in Canada valued on the TSX today, especially for Motley Fool investors wanting to buy on the cheap. What’s more, another 43% potential upside is foreshadowed to reach pre-pandemic levels.
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Goodfood Market
Fast Facts:
TSX: FOOD
Shares Trade: 7.15 CAD
P/E Ratio: 12.84
EV/EBITDA: 13.37
Dividend Yield: 0.00%
Goodfood Market is another excellent stock under $10 trading. Due to the rise in e-commerce spending brought about by the pandemic, Goodfood Market’s financials have significantly benefited. In turn, their stocks price in 2020 have moderately increased in growth rate and could be in a bit of moderation amidst the reopening of the economies. A high expectancy in demand for online grocery services will remain elevated and support its stock price. On the other hand, it expanded in terms of online offerings, marketing targets, and delivery time reduction that could be drivers of order frequency, basket size, and customer base.
Furthermore, they have positioned well through factors like solid competitive positioning, robust delivery capabilities, and growing scale. All of this is for the benefit from industry trends favourable to the business. As a result, their stock has corrected around 20% already for this year, making it a concrete purchase for long-term investors.
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Imperial Oil
Fast Facts:
TSX: IMO
Shares Trade: 33.93 USD
P/E Ratio: 1.347
EV/EBITDA: 11.87
Dividend Yield: 2.98%
Imperial Oil is one of Canada’s largest oil producers. With commodity companies thinking of new and usually strange ways of getting clean, this company is no exception. This energy company had an announcement of starting the process of vegetable oil into renewable diesel. The project still needs approval, but it certainly would help achieve the goal of low-emissions fuels by 2025. Again, amidst all of this, Imperial Oil remains one of the Canadian stocks to buy for how low its price is to book. Investors may indeed get a 30% boost in a 52-week high’s reach.
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Royal Bank
Fast Facts:
TSX: RY
Shares Trade: 132.07 CAD
P/E Ratio: 13.6
EV/EBITDA: 24.25
Dividend Yield: 3.27%
Royal Bank of Canada recently admonished estimates from analysts. The Big Six banks had reported a 34% growth in net income to $4.3B, with $3 profit per share, way above the estimated $2.72. A “surge” in deal-making was seen in this quarter for the Royal Bank, together with mortgages since they are Canada’s largest mortgage lender. It’s pretty clear why Royal Bank continues to be the largest amongst the Big Six banks — the exact reason why it is also one of the Canadian stocks to buy today.
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StorageVault Canada
Fast Facts:
TSX: SVI
Shares Trade: 6.59 CAD
P/E Ratio: 0.77
EV/EBITDA: 37.93
Dividend Yield: 0.34%
Investors could consider StorageVault Canada to be added their portfolio for this company’s solid growth prospects. Their stocks have appreciated over 444% in the last five (5) years and a whopping 1,865% in the past decade. Given its growing revenue base, it is believed that this stock will have further upside solid growth opportunities in its storage business and accretive acquisitions.
StorageVault Canada has the leading position in the domestic market regarding continued momentum in the base business and barriers to entry. On the other hand, an expectancy that StorageVault will gain from higher occupancy and rental space is an understatement. With a solid M&A pipeline, improved efficiency, and substantial funds from operations, this possibility is more likely to transpire soon.
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Tourmaline
Fast Facts:
TSX: TOU
Shares Trade: 46.22 CAD
P/E Ratio: 8.7
EV/EBITDA: 8.9
Dividend Yield: 3.45%
Amidst reaching all-time highs, Tourmaline Oil remains a firm purchase nowadays and cheap on the TSX today. Amongst the top Canadian stocks to buy during the rebound of oil and gas, it has prices that certainly promise a soar during the cold winter. Shares have increased at an incredible 133% year to date, although there is more growth expectancy as oil prices drive higher. It is currently boasting a 1.4 price-to-book ratio! Thus, despite being in the overbought territory, Tourmaline is still of great value for investors. This idea is accurate, especially as sales and earnings are looking to drive higher in this oil- and gas-demanding environment.
Final Thoughts
There are many more cheap Canadian stocks out there that you can explore yourself. But hopefully, this comprehensive list has already given you a lot of information you need to start adding cheap stocks to your portfolio once you learn how to start buying stocks in Canada. So, what are you waiting for, Motley Fool investor? Please take advantage of these cheap stocks now and savour their promising profits later on!
Cheapest Canadian Stocks To Buy
For investors who want to trade penny shares and have access to them, 50% free trades can be earned when you open a new self-managed investment account with Active Investor, a platform that offers a deeper level of market data and research. Schwab’s study also points out that stock market trades inform you of the risks involved. Finally, for investors who exchange penny shares through other discount brokerages such as Questrade, you might want to read our ultimate guide to Canada’s discount brokerage to find the brokerage that best suits your needs.
If you don’t think you have the risk in your stomach, go to our Buy Shares page to invest in a big stock market. Many stocks below $10 are not good, and investors should avoid them. However, there is some strong buy here, as a few stocks trade cheaply and offer good growth.
The search for cheap Canadian equities is a reliable way to create long-term wealth. As prices appreciate, several high-growth Canadian stocks are trading cheaply and are better within reach for investors. Let us discuss four of these Canadian stocks that are more accessible to investors and could yield excellent returns in the medium to long term.
Its low price and regular dividend payments make it a top stock at its current price level. It is well-positioned to expand the Canadian cannabis market further and to look for international expansion opportunities. With a CA $1.08 equity price, it is an excellent addition to your cannabis portfolio. StorageVault Canada shares have risen 408% in the past five years, and its growth can be attributed to strategic acquisitions and revenues growth.
At just $29, Air Canada’s stock is one of the cheapest and best Canadian stocks to buy this year. Given the outlook for the future, I would say that a $1.75 share price is a steal as it trades at 4.8 times book value and 4.2 times turnover, making CargoJet one of the best Canadian stocks you can buy at the moment. The stock has also risen more than 20% this year, making it a solid buy for long-term investors.
Air Canada shares have experienced dramatic rises and downs as investors have waited for a stock price boom. The Canadian stock market remains strong, with several stocks trading at inflated valuations. Canadian penny shares are inherently risky investments because they are not traded on major exchanges and do not meet the financial requirements of more significant exchanges.
If you are one of these investors, this article explains everything you need to know about penny stocks, including investing in penny stocks in Canada. However, if you want to find a brokerage that allows you to trade Canadian penny shares online, you need to stick to a brokerage dealing with the OTC transition.
Penny shares are small company shares traded at less than $5 a share. Canadian penny shares are small-cap stocks traded on the Toronto Stock Exchange (TSX). Regular stocks tend to be traded on major exchanges such as the TSX, NYSE and NASDAQ.
Note that small businesses are not required to file the Securities and Exchange Commission (SEC) documents when buying a penny share, as are the large companies. Listing requirements may vary depending on the stock exchange on which the share is traded. As a result, you might not be able to buy Canadian penny shares without a broker like Wealthsimple Trade.
To compile a list of the top 100 stocks, investors would need to look at smaller, riskier companies in often undiscovered and unloved sectors in the stock market. The OTCQX and OTCQB stock exchanges are at the top and middle levels for penny shares, as companies listed on these exchanges have accurate financial information and must submit it on time. You will find recently battered share prices and delisted exchanges that maintain high trading volumes but not small-cap companies.
There is no magic time to invest in solid blue-chip stocks for a reasonable annual return. However, picking a winner is a better strategy than the venture capital approach by dividing your investments into 5-10 cents shares, diversifying risk and increasing the odds of finding that elusive winner. Growth, dividends and cheap equities are just one of the Canadian stocks you can buy for a solid investment.
If you want to make money from trading, you should take time to study the Canadian stock market and learn how to trade penny shares of the TSX. Here are a few brief pointers on what to do to succeed in buying penny shares in Canada. This is by no means a comprehensive list, but I believe it is the most important thing to know (if not the most important) to ensure that you don’t lose your money.
I have noticed that investors who invest money in penny shares sometimes go cold after doing enough of their due diligence. By contrast, investors who benefit from these low-cost stocks invest a lot of hard work to ensure safety in their investment decisions.
One of Canada’s most famous penny shares is BRE (X) Minerals, a Calgary exploration company whose shares soared from 30 cents a share to over $250 before falling victim to fraud in 1997. Fool Sneha Nahata has a position in 4 cheap Canadian shares to buy in August 2021.