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Value Investing: 2 of the Best Canadian Stocks to Buy Now

Daniel Da Costa | August 19, 2021| More on:

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These days most stock industries have recovered well, so it takes some patience to find the best value stocks to buy now.

Naturally, investors will look to stocks that have been impacted severely and continue to trade below their pre-pandemic price.

However, while these stocks may be undervalued, they may not necessarily be the best stocks to buy now.

It’s important to find businesses that can at least play a role in controlling their own destiny. Otherwise, your investment will have a lot more uncertainty and, therefore, a lot more risk.

With that in mind, here are two of the best value stocks to buy now.

A top Canadian gold stock

There’s no question that gold stocks are some of the cheapest on the market to buy today. Gold prices have declined throughout the year, so, understandably, these stocks have sold off.

However, in some cases, the selloff in stocks has been exaggerated, making them some of the best value stocks to buy now.

A perfect example is a stock like B2Gold (TSX:BTO)(NYSE:BTG). B2Gold is a low-cost, low-risk gold producer, trading well undervalued at these prices.

The company has reported a slower start than expected to the year. However, much of that is related to timing issues, and the second half of the year should see the results improve significantly.

Nevertheless, B2Gold is still on track to meet the upper end of guidance for production this year. Furthermore, the gold stock is still profitable at these prices, especially considering its all-in sales costs are just over $1,000 per ounce.

The company has little debt and some impressive margins, which is why it’s returning so much cash to shareholders. At current prices, the dividend yields more than 4%.

So if you’re looking for some of the best value stocks to buy today, gold stocks are a great place to start. And one of the cheapest gold stocks by far is B2Gold.

One of the best value stocks for dividend investors to buy now

In addition to B2Gold, another top Canadian stock to buy while it’s cheap is Boston Pizza Royalties Income Fund (TSX:BPF.UN).

Boston Pizza is one of the most popular casual dining brands in Canada. Unfortunately, like many other sit-down restaurant chains, it’s been impacted consistently by the pandemic over the last year.

Capacity restrictions have been a major headwind for the company. However, as Canada progresses with its recovery, the stock could offer a tonne of potential. This is why it’s one of the best value stocks to buy now.

There is certainly still some risk, especially as the fourth wave looms. However, a large percentage of our population is vaccinated, and we have learned a lot from past shutdowns.

So I would expect Boston Pizza to continue to recover its sales over the coming months. And as these sales rise, the fund will be looking to increase the dividend. Currently, Boston Pizza is paying out only 56% of what it did before the pandemic.

So when you consider how much potential the dividend has to increase and the fact that it yields more than 5.5%, it’s clear Boston Pizza is one of the best value stocks to buy now.

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 B2GOLD CORP. and BOSTON PIZZA ROYALTIES INCOME FUND. The Motley Fool has no position in any of the stocks mentioned.

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