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Following two interest rate hikes, Canadian investors are still looking for stocks that seem cheap to buy. Although a low price is not always reflective of an inexpensive security, the following four stocks currently offer incredible upside to investors with the potential to double one’s money over time.
For investors seeking a lower-risk security with the potential for both dividend and capital appreciation, shares of Pure Industrial Real Estate Trust (TSX:AAR.UN), called PIRET for short, may just be the best option available. At a price of almost $6.50 per share, the industrial real estate investment trust (REIT) pays dividends on a monthly basis, which provides investors with a yield of almost 5%. Although shares seem to be trading sideways over the past few months, the next catalyst for the company will be the expansion into the United States, leading with their biggest customer: FedEx. With 25% of revenues coming from an A+ type of company, investors have very little to be concerned about.
For those seeking a higher risk and reward proposition, shares of Baytex Energy Corp. (TSX:BTE)(NYSE:BTE), at a price of less than $3.50, are a steal for investors who view themselves as “balance sheet buyers.” With tangible book value of more than $8 per share, the oil-exploration company could potentially more than double in value should oil find a catalyst upwards. Barring that, investors will have to be patient as the company continues to squeeze by with positive cash flows.
Investors seeking both the potential to receive dividends and capital appreciation may find the answer in shares of Melcor Developments Ltd. (TSX:MRD). Although the Edmonton-based real estate company derives a large amount of its revenues from new home constructions, the three other rental and entertainment divisions are enough for the company to sustain the dividend yield of more than 3.25% to shareholders. As population demographics dictate an increase in demand in housing, it is only a matter of time that demand for homes in Alberta increases and the company returns to making significantly larger profits. With tangible book value of more than $30 per share, we’ll have to let this security slide by at close to $15 per share.
The last name is for those willing to take a flyer on something that may or may not end well. With shares of Bombardier, Inc. (TSX:BBD.B) trading at close to $2.50 per share, the backing of the Quebec government may provide a lot of security for shareholders worried about the worst-case scenario. The challenge investors may face in the future, however, may just be the company’s ability to compete in the airline manufacturing space. Although the manufacturing of rail cars has been fruitful for the company, investors have yet to experience a significant long-term reward for being patient.
With a number of options available to investors at less than $10 per share, there is something for everyone to appreciate.
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Ryan Goldsman owns shares of Melcor Developments Inc. David Gardner owns shares of FedEx.