Got $1,000? 2 Super Cheap Stocks Investors Should Buy Today

Canadians with some extra cash in June should consider buying cheap stocks like Sleep Country Canada Inc. (TSX:ZZZ) right now.

| More on:
stock research, analyze data

Image source: Getty Images

The S&P/TSX Composite Index was up 39 points in early afternoon trading on June 8. Base metals, energy, and industrials led the way while health care continued its slide as Canada has seen its vaccine rollout accelerate. While North American markets hit some turbulence in May, it’s still a challenge to hunt for value in this environment. Today, I want to zero in on two cheap stocks that are worth snagging if you have extra cash. Let’s jump in.

Here’s why this dividend all-star stock is still undervalued

Manulife Financial (TSX:MFC)(NYSE:MFC) is a Toronto-based financial services and insurance provider. Its shares have climbed 12% in 2021. The stock is up 25% from the prior year. In September 2020, I’d discussed why Manulife looked like a cheap stock worthy of snatching up on the dip. Manulife has performed well this year, but it still offers solid value.

The company released its first-quarter 2021 results on May 5. Core earnings increased 67% from the prior year to $1.6 billion. Meanwhile, annualized premium equivalent (APE) sales rose 14% to $1.8 billion. Global insurance firms have been eager to jump into lucrative Asia-based markets as middle-class populations are on the rise in that part of the world. In Q1 2021, Manulife saw Asia’s new business value reach $477 million – up from $356 million in the first quarter of 2020.

This cheap stock last had a favourable price-to-earnings ratio of 9.4. Meanwhile, it offers a quarterly dividend of $0.28 per share. That represents a 4.4% yield.

Another cheap stock to snag in early June

Sleep Country Canada (TSX:ZZZ) is a Brampton-based company engaged in retailing mattresses and bedding-related products across the country. Two years ago, I’d suggested that investors should scoop up Sleep Country after it hit a 52-week low. The stock has increased 14% in the year-to-date period. Meanwhile, its shares have climbed 74% from the same time in 2020. Sleep Country has dipped since the end of April. Fortunately, it still qualifies as a cheap stock in this overheated market.

In Q1 2021, the company reported revenue of $183 million – up 20.7% from Q1 2020. Meanwhile, operating EBITDA climbed 12.9% to $31.5 million. The company opened two new stores in the quarter, bringing the total count to 283 across Canada. It delivered its fourth consecutive quarter of triple-digit e-commerce revenue growth. Like its peers, Sleep Country has been forced to bolster its digital offerings during the COVID-19 pandemic.

Sleep Country looks poised to return to full strength as Canadian provinces pursue a reopening this summer. With luck, this is the last we will see of increased restrictions and lockdowns as Canada’s vaccine rollout charges on. The outlook for Sleep Country and other retailers will continue to improve in this environment.

Shares of Sleep Country possess a P/E ratio of 16. This qualifies Sleep Country as a cheap stock in early June. It last paid out a quarterly dividend of $0.195 per share. This represents a 2.6% yield.

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 Ambrose O'Callaghan has no position in any stocks mentioned.

More on Investing

close-up photo of investor Warren Buffett
Dividend Stocks

3 Top Warren Buffett Stocks to Buy Right Now

Coca-Cola (NYSE:KO) stands out as a quintessential embodiment of American capitalism and mirrors Warren Buffett's investment preferences.

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Top TSX dividend stocks are now on sale.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.

3 Safe Stocks for Branching Out of the TSX

Canadians who want to look beyond the TSX might want to snatch up safe stocks like Coca-Cola Co. (NYSE:KO) and…

Read more »

stock research, analyze data
Bank Stocks

Is EQB Inc’s Growth Sustainable?

EQB Inc (TSX:EQB) is possibly Canada's fastest-growing bank. Can it keep up the growth?

Read more »

Canadian Dollars
Dividend Stocks

1 Dividend Stock That Could Create $683.87 in Tax-Free Passive Income in 10 Years

You can earn massive passive income tax free from your TFSA. Here's how with your first dividend stock or GIC!

Read more »

Dividend Stocks

This 4.26% Dividend Stock Is My Top Pick for Immediate Income

Finding a great dividend stock is one thing, but growth in the near future is all but certain for this…

Read more »

edit Safe pig, protect money
Dividend Stocks

3 Dividend Stocks You Can Safely Hold for Decades

Are you looking for dividend stocks that can perform for the long term? These three stocks could earn safe and…

Read more »

tsx today
Tech Stocks

TSX Today: What to Watch for in Stocks on Thursday, September 21

Overnight declines in commodity prices and fears of elevated interest rates for longer could drive TSX stocks downward at the…

Read more »