These 2 TSX Stocks Are Stupid Cheap

CIBC and Manulife stock is trading for dirt cheap prices right now, and it could be a fantastic time to scoop up shares.

| More on:
Volatile market, stock volatility

Image source: Getty Images

The Covid-19 pandemic is doing a number on global stock markets, and we are in the midst the kind of market correction not seen since the 2008 recession.

The last decade was fantastic for the TSX. The overall TSX Index climbed to all-time highs by the end of 2019, and it was next to impossible to pick out value stocks. Most of the cheapest equities trading on the TSX were there because they had weak long-term outlooks or apparent issues.

The coronavirus-led sell-off has entirely changed the landscape. There are dozens of high-quality value stocks in Canada trading for low prices. With the market correction taking its toll on fantastic businesses, there is ample opportunity to pick up equities at a discount.

I am going to take a closer look at two of Canada’s most attractive stocks trading for stupidly cheap prices.

Imperial financial institution

The Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) is one of the most affordable Big Five banking stocks in Canada. The stock was already trading for lower prices due to investors avoiding the bank amid fears of a housing market crash.

I think investors focus so much on possible negatives that they forget to look at the fundamentally promising aspects of CIBC. It is the weakest among the banking sector on the TSX, but that makes CIBC’s position attractive. The bank is continually making efforts to expand its wealth management business and to substantial success.

CIBC’s operational efficiency is reliable, as well as its return on equity. Its expansion into the U.S. markets is adding to its bottom line. At writing, the stock is trading for $77.48 per share – more than 30% down from the same time last year. It offers a dividend yield of 7.54% to shareholders.

More than a life insurance provider

Another beaten-down high-quality stock on the TSX right now is Manulife Financial Corp. (TSX:MFC)(NYSE:MFC). Manulife is a premier financial services provider that works as a life insurer, a bank, wealth manager, and fund provider, and it owns a significant portfolio of real estate.

The firm’s primary avenue for growth has been the Asian markets over recent years. The pandemic is increasing the death toll in its Asian segment, and that will affect Manulife’s bottom line. A further decline in asset value around the world is adding to Manulife’s woes.

Manulife, however, prepared for the possibility of a financial crisis after learning from its aggressive approach during the last recession. Manulife has invested most of its assets in conservative bonds.

The stock is trading for $14.74 per share at writing. It is down by almost 47% from its January 2020 peak. Offering a juicy dividend yield of 7.60%, this dividend-paying stock has rapidly entered value stock territory, and it could be a fantastic buy right now.

Foolish takeaway

Canada’s stock market is suddenly full of phenomenal value stocks today. CIBC and Manulife are only two assets that are declining into the value stock category. The crash is finally here, and it is up to the investors who prepared for this to buy high-quality stocks on the dip.

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 Adam Othman has no position in any of the stocks mentioned.

More on Dividend Stocks

edit Sale sign, value, discount
Dividend Stocks

3 Top Dividend Stocks That You Can Buy Under $50

The global equity markets have turned volatile over the last few weeks amid the fear that the U.S. Federal Reserve …

Read more »

ETF chart stocks
Dividend Stocks

3 TSX ETFs to Buy for Big Dividends

Dividend-paying exchange-traded funds (ETFs) are excellent investment options for passive investors. Apart from instant diversification, would-be investors earn in two …

Read more »

grow dividends
Dividend Stocks

3 of the Best Dividend Growth Stocks That Money Can Buy

Long-term investing has several advantages, which is why so many well-known investors like Warren Buffett recommend it as a strategy. …

Read more »

investment research
Dividend Stocks

3 Cheap Canadian Stocks to Buy Now Before the Dividend Deadline!

Motley Fool investors have been searching high and low for safe stocks in this volatile market. The TSX today doesn’t …

Read more »

Glass piggy bank
Dividend Stocks

How to Accelerate Your TFSA Returns From Dividend Stocks

The stock market saw a correction in January, as investors booked profits ahead of the central bank’s interest rate hikes. The TSX …

Read more »

money cash dividends
Dividend Stocks

Top 3 Dividend Stocks in Canada for 2022

Canada is home to some of the best dividend stocks in the world. With finance, telecoms, and energy dominating the …

Read more »

calculate and analyze stock
Dividend Stocks

2 Top TSX Stocks to Put on Your TFSA Buy List

TFSA investors are searching for undervalued TSX stocks to buy that have the potential to deliver big gains in 2022. …

Read more »

Payday ringed on a calendar
Dividend Stocks

Get Unbelievable Monthly Income With High-Yield Dividend Stocks

The only thing better than a dividend stock is a stock that pays dividends every month. For people who live …

Read more »