FIRE SALE: The 4 Best Canadian Stocks to Buy Today

Top Canadian stocks like Magna International Inc. (TSX:MG)(NYSE:MGA) and others look undervalued as October winds down.

| More on:
edit Sale sign, value, discount

Image source: Getty Images

The S&P/TSX Composite Index rose 24 points on October 21. Industrials and information technology were the top two performing sectors on the day. Meanwhile, base metals and energy suffered a sharp retreat. Today, I want to look at some of the best Canadian stocks that looks undervalued right now. Let’s dive in.

This top Canadian stock has bet big on electric vehicles

Magna International (TSX:MG)(NYSE:MGA) is an Aurora-based company that designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for original equipment manufacturers of vehicles and light trucks. In the beginning of 2021, I’d discussed why Magna’s play in the electric vehicle (EV) space was worth getting excited about. Shares of this Canadian stock have climbed 15% in 2021 as of close on October 21. However, the stock is down 13% over the past six months.

The company will release its third-quarter 2021 results in the first week of November. In Q2 2021, Magna saw sales more than doubled to $9.0 billion. This was powered by an increase in light vehicle production of 58%. Beyond EVs, light vehicles also boast lower emissions than their heavier counterpart. In the first six months of 2021, diluted earnings per share rose to $3.42 — up from a loss per share of $1.29 in the second quarter of 2020.

This Canadian stock possesses a favourable price-to-earnings (P/E) ratio of 11. It last paid out a quarterly dividend of $0.43 per share, which represents a 2.1% yield.

Why it’s not too late the buy the dip in this stock

Stella-Jones (TSX:SJ) is engaged in the production and marketing of pressure-treated wood products in Canada and the United States. This Canadian stock has dropped 2.8% in 2201. However, the stock has increased 8.1% week over week as it bounces back from its sharp dip.

In Q2 2021, the company delivered sales growth of 18% to $903 million. Meanwhile, EBITDA increased 50% to a record $180 million. Shares of this Canadian stock last had a solid P/E ratio of 10. It offers a quarterly dividend of $0.15 per share, representing a modest 1.6% yield.

Here’s a top insurer you can trust for the long term

Manulife Financial (TSX:MFC)(NYSE:MFC) is a Toronto-based insurance and financial services company. Shares of this Canadian stock have increased 11% so far this year. The stock is up 32% from the same time in 2020.

Investors can expect to see the company’s next batch of results on November 3. It delivered core earnings growth of 18% to $1.7 billion in the second quarter of 2021. Meanwhile, resurgent markets drove Global Wealth and Asset Management net inflows of $8.6 billion — up from $5.1 billion in the second quarter of 2020.

This Canadian stock possesses a very attractive P/E ratio of 6.8. Better yet, it last paid out a quarterly dividend of $0.28 per share. That represents a solid 4.4% yield.

A top Canadian stock to snatch up, as green energy is on the rise

Capital Power (TSX:CPX) is the fourth Canadian stock I’d suggest investors scoop up in late October. Its shares have climbed 27% in the year-to-date period. Capital Power is up 45% year over year. Back in March, I’d discussed why investors should seek exposure to the green energy space for the long haul.

The company is set to release its third-quarter 2021 results early next week. In Q2 2021, Capital Power posted adjusted EBITDA of $544 million for the first six months of the fiscal year. This was up from $451 million in the first half of 2020. Shares of this Canadian stock last had a favourable P/E ratio of 26. It offers a quarterly dividend of $0.547 per share. That represents a 4.9% 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 of the stocks mentioned. The Motley Fool recommends Magna Int’l.

More on Investing