As we head into the new year, the pandemic is once again one of the most significant forces impacting the market. So, if you’re looking for a stock to buy that’s cheap in 2022, finding a high-potential recovery stock is a great place to start.
Many recovery stocks that for so long have been working to get their operations back to pre-pandemic levels have again seen an impact on operations, which has caused their stocks to become quite cheap.
But as we continue to understand the virus’s many strains and are already researching which solutions will work for the Omicron variant, we can be confident that soon enough, the economy should be back on track, and we should be recovering from the pandemic once again.
So, while these recovery stocks are being sold off and are trading cheap, here are two of the best to buy that could outperform in 2022.
Boston Pizza is an excellent stock for dividend investors
Restaurants are some of the top recovery stocks to buy, but at this price, Boston Pizza Royalties Income Fund (TSX: BPF.UN), the number one casual dining restaurant chain in Canada, is head and shoulders above the rest.
The fund was understandably impacted by the pandemic and continues to be as capacity restrictions are reimplemented in many provinces across the country. This has led to another pullback in the price of Boston Pizza units, making it considerably cheap. But I’ll be honest, I thought the recent wave would have caused the stock to selloff more.
Nevertheless, its resilience recently shows that not only has Boston Pizza proven through the pandemic it can weather the storm, but it’s also already one of the top stocks to buy while it’s cheap. It’s clear that investors have already been buying the dip, so it’s understandable it hasn’t sold off much more.
Right now, though, it still offers a solid dividend yield of more than 6.6%. And Boston Pizza’s annual distribution is just 74% of what it was before the pandemic, so it still has more room to grow.
Therefore, over the coming years, as the pandemic eventually becomes less of a concern, Boston Pizza offers both upside in the price of the fund’s units, but it also pays an attractive dividend. And over time, that dividend should see some more increases.
So, if you’re looking for a high-quality recovery stock to buy for 2022 and beyond, Boston Pizza is an excellent choice.
Corus Entertainment is one of the best value stocks to buy while it’s this cheap
In addition to Boston Pizza is a company that’s not quite a recovery stock in the same way, but it’s so cheap that it has to be one of the top stocks to buy for 2022.
Corus Entertainment (TSX: CJR.B) is a media company that’s been one of the cheapest Canadian stocks for years. It was first impacted by the pandemic (while in the middle of years-long turnaround) and has just never really recovered.
And while that may sound like the pandemic derailed its turnaround, which has largely been about reducing its massive debt levels, that couldn’t be further from reality. Instead, while Corus was impacted severely by the pandemic during the first few quarters, it has continued to earn a tonne of free cash flow, which it’s used to reduce its debt.
Over the last two years, it’s reduced more than 20% of its long-term debt. Furthermore, it continues to find new ways to grow its operations, including its streaming services and content-creation business.
Corus has to be one of the cheapest stocks in Canada, currently trading with a price-to-earnings ratio of just 5.7 times. In addition, it pays a dividend that yields 5.1%. So, you can earn an attractive amount of passive income while you wait for the stock to appreciate back to fair value.
Therefore, if you’re looking for a recovery stock to buy for 2022, Corus is one of the top companies to consider.
