You don’t have to look far these days to find some bargain stocks. A potential recession has sent share prices across the board trending further and further down. That doesn’t mean that all shares are created equal, however.
While there are definitely some low prices, I would consider looking into well established, quality companies at a time like this. Luckily, there are quite a few of these to be found as well.
In fact, some of them are trading well beyond fair value, making now a great time to pick up these quality stocks before a rebound.
Enbridge Inc. (TSX:ENB)(NYSE:ENB) is a fantastic buy right now because it’s incredibly cheap with a solid future ahead of it. The company is currently in growth mode, with $16 billion in current projects underway and $3 billion in future projects after 2021.
The company is also supported by long-term contracts that has and will keep cash rolling in for decades.
Yet shares are trading near the same price as witnessed at the beginning of 2019. This is likely due to the oil and gas industry’s slump recently, and investors fear that the low oil prices will affect these companies.
However, this merely proves that pipelines like those offered by Enbridge are needed now more than ever. While company experienced some setbacks in the last few months, they now appear to be resolved.
So if you’re looking for a great buy-and-hold investment, now’s the time. As of writing, the stock has a potential upside of 36% to reach fair value.
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Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is another fantastic option for your portfolio, yet has been trading down recently. The company has managed to post some strong earnings results despite the incoming recession, though it missed analyst expectations during its latest results.
This, coupled with a looming recession, has kept the stock below its fair value estimate of about $82 per share.
Again, we have a stock with strong future growth potential. The bank has seen major success in the United States, becoming one of the top 10 banks in the country and still more room to grow.
Now that it’s entered the financial management realm, investors should expect to see some incredible returns over the next few years. We have yet another great buy-and-hold option that you can pick up today for a 14% discount.
Finally, we have Kinder Morgan Canada Ltd. (TSX:KML)(NYSE:KMI), a company that has been selling off everything and providing investors with the opportunity to take advantage of a company that’s swelling with cash.
Its Canadian operations are now merging with Pembina Pipeline Ltd after a $2.3 billion deal and a cross-border pipeline for $1.55 billion. This sent shares soaring in late August.
The company has been looking to get out of Canada for a while, which began with selling its Trans Canada pipeline last year. Now that the company has a great deal of cash on hand, it can use that money to pay down its debts and look for new opportunities.
While investors have been nervous, they shouldn’t be. In the meantime, the company is taking advantage of its stake in Pembina. Once it starts announcing further projects, this well-known stock should rise again.
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 Amy Legate-Wolfe owns shares of ENBRIDGE INC, Pembina Pipeline Ltd. and TORONTO-DOMINION BANK. The Motley Fool owns shares of Enbridge and Kinder Morgan. Enbridge is a recommendation of Stock Advisor Canada. Pembina Pipeline is a recommendation of Dividend Investor Canada.