3 of the Best Under-$50 Canadian Stocks to Buy Right Now

Here’s why shares of Enbridge, Air Canada, and Algonquin Utilities are attractive buys for Canadian investors.

| More on:
Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks

Image source: Getty Images.

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

One of the best ways to build long-term wealth is to invest in quality stocks. You can start with a small sum of capital and regularly purchase stocks that have the potential to generate outsized gains. Here, Canadian investors can take a look at three lower-priced stocks on the TSX that are trading below $50.


The first stock on my list is Enbridge (TSX:ENB)(NYSE:ENB), which is one of the most diversified energy companies in North America. ENB stock is trading at $46.56 a share, which indicates a forward yield of 7.1%.

Despite volatility in commodity prices since the onset of the COVID-19 pandemic, Enbridge has managed to increase dividends this year. Since 1995, the TSX giant has increased dividends at an annual rate of 10%. Enbridge’s cash flows are contracted or regulated, and it expects to increase cash flows between 5% and 7% through 2023, which suggests further dividend increases are on the cards.

The company continues to increase its base of cash-generating assets and aims to expand its renewable energy portfolio in the upcoming decade. Enbridge will continue to grow beyond its existing portfolio of 23 onshore and offshore wind farms in Europe, driven by the shift towards clean energy solutions. The Joe Biden administration has outlined a goal to create 30 gigawatts of offshore wind capacity in the U.S. by 2030.

Algonquin Power & Utilities

One dividend-paying growth stock on the TSX is Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN). It owns and operates a portfolio of regulated and non-regulated utility assets in Canada, the U.S., Chile, and Bermuda. AQN generates and sells electrical energy through non-regulated renewable and clean energy power-generation facilities. It owns and operates hydroelectric, wind, solar, and thermal facilities with a generating capacity of 2.1 gigawatts.

AQN stock is trading at $18.53 per share, indicating a forward yield of 4.5%. It derives around 33% of its income from renewable energy and the rest from rate-regulated electric, gas, and water utility business. Its robust business model has allowed Algonquin to increase dividends at an annual rate of 10% in the last decade.

Between 2021 and 2025, the company expects to grow adjusted earnings between 8% and 10% annually. It also plans to invest over $9 billion in capital expenditures, of which $3.1 billion will be deployed in the renewable energy segment.

Air Canada

With the vaccination rollout gaining pace in Canada, it might be time to consider recovery stocks such as Air Canada (TSX:AC). While the airline companies were hit hard amid the pandemic, the global economy might reopen by the end of the year driving shares of Air Canada and peers higher.

Air Canada stock is trading at $26 per share, which is 50% below its record highs. It was one of the top-performing stocks on the TSX in the decade prior to the COVID-19 pandemic. The company also reported 27 consecutive quarters of profits before Q2 of 2020. Air Canada has now posted a net loss in four consecutive quarters, and in the first quarter of 2021, its net loss stood at $1.30 billion, which meant the company burnt around $14 million each day.

It remains a top bet for contrarian investors if the company can turn profitable by Q4 of 2021.

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.

The Motley Fool owns shares of and recommends Enbridge. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned.

More on Dividend Stocks

growing plant shoots on stacked coins
Dividend Stocks

2 Oversold TSX Dividend Stocks to Buy Now and Own for 25 Years

These top TSX dividend stocks look oversold and now offer attractive yields for TFSA and RRSP investors.

Read more »

Profit dial turned up to maximum
Dividend Stocks

RRSP Investors: 2 Undervalued TSX Stocks to Buy Now for Total Returns

Top TSX dividend stocks are now on sale for RRSP investors seeking attractive total returns.

Read more »

TFSA and coins
Dividend Stocks

2 Beaten-Down Stocks to Buy for Your TFSA

Two beaten-down, but high-yield TSX stocks are profitable options for TFSA investors.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Dividend Stocks

Inflation Soars to 7.7%: 1 Dividend Stock to Buy Now

Enbridge (TSX:ENB)(NYSE:ENB) stock looks like a magnificent dividend stock to help Canadians deal with inflation at 7.7%.

Read more »

Dividend Stocks

RRSP Investors: 2 Oversold Dividend Stocks to Buy Now for Total Returns

These great Canadian dividend stocks look cheap today for an RRSP focused on total returns.

Read more »

Volatile market, stock volatility
Dividend Stocks

2 Dividend Stocks to Own When the Market Is in Turmoil

Two TSX stocks can sustain dividend payments, even if the present market turmoil extends longer than expected.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Passive-Income Stocks to Help You Through This Market Correction

These three passive-income stocks offer stellar dividends around 6% to help get you to the other side of this market…

Read more »

Coworkers standing near a wall
Bank Stocks

Policy Rate: 2 More Hikes After July 2022 to Reach Neutral Level

The Bank of Canada might need three more rate hikes beginning in July 2022 to reach neutral levels.

Read more »