Are you looking for cheap stocks to add to your bargain collection?
Now is a good time to do it.
Despite some gains early this week, stocks remain down from their highs for the year. As of Wednesday morning, the TSX was down 2.8% from its high set in November. If there are bargains to be found, now would be the time to go out and get them. In this article, I will explore four cheap stocks to grab in Canada in December.
TD Bank
Toronto-Dominion Bank (TSX: TD)(NYSE: TD) stock is a classic value play. Trading at just 10 times earnings, it’s very cheap. I’ve held TD stock for about three years and plan to continue holding it for the foreseeable future. Even after the 32% gain it delivered in 2021, the stock is still a rock-bottom bargain. Additionally, the stock delivered solid growth in adjusted earnings in its most recent quarter. Interest rates appear set to rise in 2022, so TD Bank could deliver solid profitability in the year ahead.
Suncor Energy
Suncor Energy (TSX: SU)(NYSE: SU) is an energy stock that sports extremely low valuation metrics. It trades at 19 times earnings, 1.3 times sales, and 1.28 times book value. Whichever metric you choose to look at, Suncor is very cheap. That’s partially because the stock dipped this week on Omicron concerns. When new COVID waves flare up, oil prices tend to dip, because people travel less during lockdowns. In the long run, though, Suncor should be able to deliver solid value to investors.
Enbridge
Enbridge (TSX: ENB)(NYSE: ENB) is another value energy stock like Suncor. It trades at just 18 times earnings and 2.2 times sales. It also has an extremely high 6.9% dividend yield. If you like Suncor but are concerned about its sensitivity to oil prices, you might want to consider a pipeline stock like Enbridge. Pipeline stocks make money off transportation fees rather than oil sales. As a result, they don’t fluctuate with oil prices as much as integrated energy companies do. To be sure, Enbridge faces risks of its own — hello, Line Five — but it’s a high-yield play with a lot of potential.
Royal Bank of Canada
Last but not least, we have Royal Bank of Canada (TSX: RY)(NYSE: RY). This is another bank stock that could profit from higher interest rates in the year ahead. In RY’s case, the impact of higher interest rates could be a bit stronger than it would be in TD’s case. Royal Bank is more geographically concentrated in Canada than TD is. TD has a huge U.S. retail bank, RY’s U.S. exposure is much lower. Interest rate hikes in Canada are all but confirmed, they are much less likely to materialize in the United States, where the Federal Reserve has been sending mixed signals. So, if you’re looking for a catalyst bank play based on interest rates, RY might be slightly more your speed than TD.
