It’s amazing how frightened some people can be. The old phrase “buy low, sell high,” just doesn’t seem to jive with a lot of people in the markets. There are still a number of stocks out there that are completely undervalued and due to make huge comebacks. Some of them are stable investments that investors should be buying now in order to make a lot of money over the long term.
Three examples of these kind of stocks are Enbridge Inc. (TSX:ENB)(NYSE:ENB), Canadian Natural Resources Limited (TSX:CNQ)(NYSE:CNQ), and Brookfield Infrastructure Partners (TSX:BIP.UN). Each offers an opportunity to get in while these stocks are low, and not just sell when they’re higher, but hold onto them for a long, long time, and see your funds change from reasonable to rich.
Even with the Line 3 replacement and expansion project approved; even with oil and gas prices rebounding; even with the $16 billion it has to expand its pipelines even further; even with its long-term contracts that will see the company solidly covered in cash for decades; investors are still undervaluing Enbridge.
At the time of writing, this stock trades at around $50 per share, but it should be much closer to $62 per share. And that’s just the beginning. When Line 3 gets going and 750,000 barrels of crude are flowing across our border, that price should jump to much, much higher.
Canadian Natural Resources
If you look at the historical performance of Canadian Natural Resources, you’ll see that there have been a few dips over the past five years. But those dips come back up almost immediately, and right now we’re smack in the middle of one. Overall, this stock has continued in an upward direction, making it a great long-term investment.
That’s due to the company’s ability being able to pump out profits even during an oil crisis. In Q4 2018, the company reported $1.2 billion in cash flow, and with costs continuing to fall, it should not only have more cash to start up expansion again, but it should also be able to put that extra cash into investors’ pockets in the form of its steady and stable dividend.
Brookfield is enormous, and lately has been hitting some pretty high highs, but now it’s levelled off, providing an opportunity for investors to get in. The company generates a steady influx of cash through fee-based contracts operations, and predictable volumes through its transportation assets, energy businesses, and data infrastructure.
Its portfolio has continued to grow, as once it generates cash, the company puts it toward keeping a strong balance sheet and investing in growth. This cash growth should continue at a 5-9% increase per year, according to the company, with 12-15% returns on investments.
Currently Enbridge, Canadian Natural Resources and Brookfield remain undervalued at $49.55, $41.73 and $55.35 respectively. But that won’t last long. Even if a recession comes, these are long-term stocks to hold onto that could turn your TFSA into a retirement portfolio in only 20 years.
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Fool contributor Amy Legate-Wolfe owns shares of ENBRIDGE INC. The Motley Fool owns shares of Enbridge. Brookfield Infrastructure Partners, CN and Enbridge are recommendations of Stock Advisor Canada.