Often, when investors see volatility, the first reaction is usually a degree of concern. However, once investors figure out the cause of the volatility and what, if any, stocks might be impacted long term, then it’s time to find cheap Canadian stocks while they trade at a discount.
It helps to have a list of high-quality stocks you’d like to buy ahead of time, as these dips in price don’t usually last very long. So, the quicker and more decisively you can act, often, the better discount you can get before the stocks recover.
Over the last few weeks, most stocks that have been selling off are higher-growth investments, such as tech stocks and cryptocurrencies. However, companies across the board have sold off, so there are plenty of cheap Canadian stocks to buy now. Here are two of the very best.
A top renewable energy stock
One of the top growth stocks in Canada over the last few years has been Northland Power (TSX:NPI). The entire renewable energy sector has been rallying and offering a tonne of growth potential. However, Northland has been one of the best growth stocks in the industry.
The stock continues to have one of the most promising growth plans of any company in its industry. Northland will commit up to $20 billion over the next five years to grow its portfolio.
These will consist of both organic growth projects and attractive acquisitions the company can find. It’s not just renewable generating assets that it’s looking to buy either. The company is also looking to continue adding utility businesses to its portfolio for stability and wants to diversify its green energy exposure to other ancillary businesses like cleantech.
Northland is on its way to becoming a massive green energy powerhouse, giving it tonnes of prospects for growth in the future.
In my view, at below $40, the Canadian stock is so cheap that it’s a no-brainer buy. Plus, its consensus analyst target price is nearly $50. So, according to analysts, investors have more than 20% potential upside over the next year.
That short-term potential, though, is just a reason why it’s one of the top Canadian stocks to buy today. Over the long run, investors can earn a lot more, especially when you consider it also pays a dividend, which currently yields 3%.
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A top Canadian infrastructure stock trading cheap
Another high-quality Canadian stock to buy now is Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP).
Brookfield owns an incredible portfolio of long-life infrastructure assets all over the world. This makes the company an ideal investment, especially to hold for decades. Not to mention, it’s sold off from its 52-week high over the last month, making the Canadian stock cheaper for investors to buy today.
The company is not only diversified by geography; it’s well diversified by industry, too. Brookfield owns businesses in the transportation industry, such as railroads, toll roads, and ports. It owns data infrastructure businesses such as telecom towers and data storage centres.
Plus, it also owns midstream energy and utility businesses — all crucial long-life assets that can return huge sums of cash. Brookfield is one of the best managers of capital and is consistently recycling capital into new projects or businesses that will grow unitholder value.
The fund targets 12-15% annual growth for investors over the long term. Plus, it aims to grow its payout to shareholders by 5-9% each year.
This makes Brookfield one of the best stocks to buy and hold for years. So, when you can buy this incredible Canadian stock for cheap, it only increases the massive return potential you can make over the long run.
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 Daniel Da Costa owns shares of BROOKFIELD INFRA PARTNERS LP UNITS and NORTHLAND POWER INC. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners.