Beginners: 3 Cheap Stocks to Buy in a Market Pullback

Investors just starting out should look to cheap stocks like National Bank (TSX:NA) to scoop up in this market pullback.

| More on:
stock data

Image source: Getty Images

The S&P/TSX Composite Index was down 94 points in late-morning trading on December 8. In late November, I’d looked at some of the top stocks to buy as the year winds to a close. Investors who are just starting out may be intimidated in the middle of a market pullback. Today, I want to look at three cheap stocks that are worth snatching up in the face of volatility. Let’s jump in.

Why beginners should snatch up this discounted green energy stock

Brookfield Renewable Energy (TSX:BEP.UN)(NYSE:BEP) is a Brookfield-based company that owns a portfolio of renewable power generating facilities in North America and around the world. Shares of this cheap stock have dropped 21% in 2021 at the time of this writing. The stock is down 8.8% month over month.

Beginners should be attracted to Brookfield for its exposure to the burgeoning green energy space and its impressive dividend-growth history. In Q3 2021, the company generated funds from operations of $210 million, or $0.33 per unit — up 32% from the previous year. Brookfield still boasts a very strong balance sheet with a whopping $3.3 billion of available liquidity.

Shares of this cheap stock last had an RSI of 32, putting it just outside technically oversold territory. Moreover, it offers a quarterly dividend of $0.304 per share. That represents a 3.4% yield.

One top bank that is a cheap stock after the recent pullback

Canada’s big banks unveiled their fourth-quarter and full-year 2021 results in late November and early December. National Bank (TSX:NA) is the smallest of the Big Six Canadian bank stocks, but it has a huge presence in its home province of Quebec. Shares of this cheap stock have dipped 6.9% in the month-over-month period. The stock is still up 35% so far in 2021.

In the fourth quarter, National Bank delivered net income growth of 58% to $776 million, or 61% on a per-share basis to $2.19. Meanwhile, net income for the full year jumped 53% to $3.17 billion. The bank delivered strong growth in all its major segments.

This cheap stock possesses an attractive P/E ratio of 10 at the time of this writing. Better yet, it hiked its quarterly dividend by 16% to $0.87 per share. That represents a 3.5% yield.

Here’s another cheap stock that is perfect for beginners

Earlier this year, I’d discussed why Enbridge (TSX:ENB)(NYSE:ENB) was an energy heavyweight that investors of all stripes could trust for the long haul. Shares of this cheap stock have increased 18% in the year-to-date period. However, the stock has plunged 7.9% over the past month.

Enbridge released its third-quarter 2021 earnings early last month. Meanwhile, adjusted earnings rose to $1.2 billion, or $0.59 per common share, compared to $1.0 billion, or $0.48 per common share, in Q3 2020. Moreover, adjusted EBITDA was reported at $3.3 billion — up from $3.0 billion in the prior year.

Beginners should look to target this cheap stock as it possesses a very favourable P/E ratio of 17. It recently hiked its quarterly dividend to $0.86 per share. That represents a monster 7% 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 Enbridge.

More on Investing

Dial moving from 4G to 5G
Dividend Stocks

TFSA Investors: Invest $3,000 for $2,150 in Income Every Year 

If you spend time in the market, you can chart out a plan to earn $2,150 in annual passive income…

Read more »

money cash dividends

Sitting on Cash: Invest $25,000 in This Dividend Stock Instead to Get $82,052 in a Decade

Here's a top dividend stock that is well worth snatching up for Canadians who have some extra cash to burn.

Read more »

Redwood trees stretch up to the sunlight.

2 Stocks With Surprising Growth Potential

Alimentation Couche-Tard and Restaurant Brands International are stealthy growth stocks that are trading too cheap right now.

Read more »

potted green plant grows up in arrow shape

2 Incredible Growth Stocks With a Bright Outlook for 2023

Constellation Software (TSX:CSU) stock and another tech titan that may be too cheap to ignore, as it looks to power…

Read more »

analyze data
Dividend Stocks

3 Top Dividend Stocks to Buy and Hold Forever

These three dividend stocks on the TSX today have offered substantial gains in the last year and could prove strong…

Read more »

analyze data
Dividend Stocks

3 Surprising Stocks Trading Lower in 2023

Some of the weakest performers of 2023 (so far) may be powerful additions to your portfolio in the right market…

Read more »

Golden crown on a red velvet background
Dividend Stocks

3 Surefire Dividend Aristocrats That Are No-Brainer Buys in 2023

Cash flow-rich companies such as Fortis and Canadian Utilities should be part of your dividend portfolio in March 2023.

Read more »

Airport and plane
Dividend Stocks

Down by 20%: Is Air Canada Stock a Buy After its Earnings?

Air Canada stock continues trading for a significant discount after its earnings release, but it still might not be a…

Read more »