As most investors know by now, volatility like we are currently seeing is a great time to buy stocks cheap.
Any time an index loses 20% or more, sending it into a bear market, there are bound to be some extremely cheap stocks that become attractive.
Attractive valuations come even faster when indices reach bear market territory in less than a month, like we’ve seen recently.
Because numerous stocks go on sale at the same time, it can be difficult to figure out which to buy. So, here are the top five value investments to make today.
Canadian National Rail
Canadian National Railway is one of the top stocks in Canada. Because it’s one of the best stocks, it virtually always trades at a premium.
This makes the current moment a major opportunity, one of the only times investors can gain exposure at a cheap price.
Its business is the heart and soul of Canada’s economy. So, although you may see a slowdown in its operations, the country couldn’t function without Canadian National Rail. That reliance that we have on CNR is what makes it such a great investment.
And because it’s come down by nearly 25% from its high by Thursday’s close, it’s extremely cheap.
BCE, the biggest of the telecoms, is another must-buy during this bear market. Its massive reach and dominant business make it a clear-cut winner long term.
Couple that with the introduction of 5G technology, which is on the horizon, and BCE looks like one of the most attractive stocks on the TSX.
It’s reliable, grows at a decent pace for its size, and pays out an attractive dividend.
At current prices as of Thursday’s close, its dividend yields 6.6%, and the stock trades for just 15 times earnings.
Enbridge, one of the top energy companies in Canada, is the third stock on the list, as it gets extremely cheap. Similar to Canada’s reliance on CNR, the Canadian energy industry relies on Enbridge.
The company transports roughly a quarter of all North American oil and natural gas. In addition, it has other regulated businesses, such as its utility business, which helps to diversify operations.
The company, most importantly, is reliable especially when it comes to its dividend.
The dividend yields a whopping 9%, and the stock has major value trading at just 13.5 times earnings.
A number of Canadian banks have been sold off heavily, making bank stocks extremely cheap. With banks, though, it can be hard to know what risks could be possible if the economy gets worse.
The Canadian banking industry is world renowned for being one of the most stable anywhere. The stability is what makes the banks such an attractive investment. However, because it’s unclear exactly what exposure each bank has, buying the BMO Equal Weight Banks Index ETF could be a better choice.
The ETF will mitigate company-specific risk while still exposing investors to the fundamentals of the banking industry.
It’s extremely attractive, pays a 6.4% dividend, and hasn’t been this cheap since 2013.
Last but not least is Choice Properties REIT. Real estate is always an important industry, and the discount investors can get now is a major opportunity.
Choice is one of the top retail real estate businesses on the TSX. You could consider a residential real estate ETF as well, but valuations aren’t as cheap. In addition, investors can receive a higher yield from Choice than a number of its residential peers.
The higher dividend yield, currently 5.9%, could be crucial if we enter a recession, which is why I’m recommending Choice today.
It has extremely strong assets and top businesses as its tenants, plus almost no mall exposure, which is something investors have concerns about with other REITs.
Anywhere you look, almost every company is going to be on sale to one degree or another. These are the best five business in Canada with the most opportune discounts.
Don’t miss out on your chance to gain exposure at these reduced prices. It could be the best chance you have to set you portfolio up for the long term.
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Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway and Enbridge. The Motley Fool recommends Canadian National Railway.