After a market crash, investors seek growth — and plenty of it. There are endless opportunities for investors to pick up stocks at unbelievable prices and see shares rise. But as Canadian stocks rebound, it becomes much harder for investors to find that diamond in the rough.
After a rebound, investors should turn their attention to value stocks. While these Canadian stocks may have a higher share price than other stocks, the share price is much cheaper than the company’s future potential. If you’re a long-term investor, you’re bound to see endless growth from these value stocks. So let’s take a look at three options.
E-commerce adjacent Canadian stocks
While other investors continue to wait around hoping that an e-commerce stock will drop, you should change your strategy. Real value can come from companies simply related to industries such as e-commerce. One great example of this is light industrial property owner WPT Industrial REIT (TSX:WIR.UN).
WPT Industrial owns 109 light industrial properties throughout North America. This is where e-commerce companies can ship and receive products. The company has seen strong, stable income during the pandemic, creating even more opportunities for growth through acquisition. Investors can also lock in a solid 4.53% dividend yield from Canadian stocks like this one.
Shares in WPT Industrial offer 1.2 times book value and are up 41% in the last year. Given the outlook for e-commerce, that should continue to rise over the next decade at least.
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Buy the pullback
There have been multiple pullbacks recently. While not a crash, this still offers investors the chance to get in on strong companies offering cheap share prices. One company I would highly recommend is Brookfield Renewable Properties LP (TSX:BEP.UN)(NYSE:BEP).
Canadian stocks such as this are the ones to beat in the renewable energy sector. Brookfield operates 19,000 megawatts of renewable energy assets around the world. This diverse range means you’re basically getting an REIT with a foot in every single type of renewable energy technology. Brookfield shares climbed when President Joe Biden took office, but have since dropped back.
Shares are still up 26% in the last year, however. The company currently offers shares at 2.5 times book value. You can therefore pick up this value stock at a discount and lock in a 3.4% dividend yield in the process.
There were a lot of changes in the health care sector during the pandemic. One thing was clear: health care needs investment. That’s why this is also an overlooked area of investment among Canadian stocks. Companies like NorthWest Healthcare Properties REIT (TSX:NWH.UN) offer value and security in the years to come.
NorthWest continues to release strong earnings reports, thereby demonstrating that its diverse range of health care properties around the world continue to take in cash. The company has an average lease agreement of 14.5 years and an occupancy rate of around 97% as of writing. It also offers a substantial 6% dividend yield for today’s investor.
However, its shares trade at 1.4 times book value and 5.9 times sales with a price-to-earnings ratio of 10 over the last year. Shares have climbed 45% in the time and haven’t looked back. So if you want stable growth and passive income for a cheap prices, Canadian stocks like this are exactly what you need.
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.