The TSX is still full of value, despite what the correction-calling bears say. And in this piece, we’ll have a look at three names that I’d feel comfortable buying this September, one of the spookiest months of the year for the stock market, with maybe the exception of October! In any case, Canadian investors insisting on value likely will not feel the full force of the hit whenever the next market correction finally arrives.
Consider MTY Food Group (TSX: MTY), A&W Royalties Income Fund (TSX: AW.UN), and TC Energy (TSX: TRP)(NYSE: TRP), three bargains that have already sold off modestly over the past few weeks.
MTY Food Group
MTY is effectively the king of the Canadian food court. As shopping malls reopened, MTY stock was quick to bounce back from what was a pretty scary 2020. Shares of the name overextended themselves earlier in the year, struggling to break through the $60 ceiling of resistance. Today, after a solid quarter, MTY has broken out, and it could be in a spot to make a run past those all-time highs not seen since late 2018.
Despite the Delta COVID variant, I don’t think the Canadian fast-dining firm is about to pull back again. Even if it does as a result of lockdowns, support at around $50 looks quite strong. In any case, Canadians have clearly not lost their taste for their favourite casual dining brands. Taco Time, Vanelli’s, Yogen Fruz, and many other food court staples are gaining traction. Never underestimate the staying power of a good restaurant brand!
A&W Royalties Income Fund
Sticking with the quick-serve restaurant theme, we have the legendary burger company that’s also enjoyed an epic comeback over the past year and a half. Unlike MTY, A&W has still yet to breakout. Shares recently slipped 4% thanks in part to Delta fears. The yield, which is flirting with the 5% mark, has swollen accordingly.
While that’s a modest pullback, I’d look to jump in, especially if you’re a fan of the brand and are looking for a safe and sound distribution that’s poised to grow at an above-average rate on the other side of the pandemic. The appetite for the burger family remains strong. And whether temporary COVID-countering restrictions come online again, A&W is still a great forever holding for those seeking the perfect mix of passive income and appreciation.
TC Energy
Last, we have pipeline TC Energy (TSX: TRP)(NYSE: TRP), which started the year strong but really started to sag once the page was flipped on the second half. Since peaking in mid-June, the stock fell as low as 10% before bouncing back partially to $60 and change.
Keystone XL is off the table, but that’s no reason to give up on TC stock. There are many great growth projects to fuel many years’ worth of growth. Fellow Fool Chris MacDonald seems to think that the company is better off without Keystone XL. I’d have to agree. The company is moving on, and its stock will follow.
With some of the best gas assets in the country, investors should view the company less as an energy transporter and more of a steady utility play with a swollen dividend. For now, shares command a 5.8% yield, which is yours for the taking.
