Cheap stocks are poor investments only if they are “penny stocks.” You can’t evaluate the companies based on historical or future performances because it’s non-existent. However, there are TSX stocks that are trading at absolutely cheap prices at the present.
If you have budget limitations and affordability is a consideration, do what other investors with the same concern do. Invest in good names like Kinder Morgan Canada Limited (TSX:KML)(NYSE:KMI), Seven Generations Energy Limited (TSX:VII), Theratechnologies Inc. (TSX:TH), and Whitecap Resources Inc. (TSX:WCP).
Cheap stocks offering value for money
Kinder Morgan Canada owns and operates 84,000 miles of pipelines and 151 terminal facilities in Canada. The company is known as a good mid-streamer in North America and described by others as a “steady Eddie” stock.
Historically, pipelines great investment as most contracts are long-term and therefore, there is recurring income.
The $1.1 billion company continues to generate profits and will continue to do so with the tremendous demand for more energy infrastructures. Among the clients are major oil companies, energy producers and shippers, local distribution companies and businesses in other industries.
Seven Generations, a developer of natural gas properties in Canada, has a $2.25 billion market capitalization. The stock price has gone down to $6.38 which is a great buying opportunity.
Despite the lackluster market environment of late, Seven Generations posted strong revenue and profits in the last two years.
The price could triple moving forward given the growth estimate of 20.20% in 2020 and 33.55% over the next five years. That growth would come from premium markets in Eastern Canada, the U.S Midwest, and the U.S. Gulf Coast. About 90% of Seven Generations’ will be sold in those markets.
Whitecap Resources is a real bargain at $4.20 per share at writing. The $1.735 billion has rebounded a great deal in 2018 from a dismal 2017. This year, the growth estimate is 131.6%. A potential climb to $10 looms not later than the second quarter of 2020.
For the last five years, Whitecap’s average dividend yield is 5.06%. What is reassuring is that Grant Fagerheim, the company CEO himself, said Whitecap has no intention of reducing the dividend payouts to shareholders.
He added that on a go-forward basis, the company would even be increasing the dividends.
There are worries about the prices of oil and gas stocks falling that dividend yields would drop and dividends payments will be unsustainable. Whitecap’s CEO said regulatory uncertain and pipeline delays are the major reasons for the downtrend.
Investors who are not into the energy space can invest in Theratechnologies. The prospects for the $417 million specialty pharmaceutical company prospects are very bright. The biotech firm posted $15.6 million net sales in the second quarter, or a jump of 62.2% versus the same quarter last year.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of Kinder Morgan.