Taking advantage of stocks while they are undervalued can be a big boost when considering compound interest. These days, though, there aren’t that many top stocks to buy in your TFSA that currently trade at a cheap valuation.
Over the past two years, many stocks across the board have been rallying. And although some tech stocks have sold off lately, most companies earning strong cash flow and especially those paying a dividend have been gaining a tonne of value lately.
So if you’re looking to get the best bang for your buck in March and buy top Canadian stocks while they’re cheap, here are two of the best to consider today.
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This cheap Canadian stock is one of the top investments to make in your TFSA
There’s no question that if you’re looking for a cheap Canadian stock to buy today, Corus Entertainment (TSX: CJR.B) is one of the best investments for your TFSA.
Corus has been cheap for some time now. But even if the stock doesn’t recover and begin rallying right away, you can be happy to own a stock that not only returns passive income but continues to earn free cash flow and improve its financial position.
By using excess cash left over after the dividend to pay down debt and strengthen the balance sheet, Corus has grown shareholder’s equity consistently since the pandemic began.
As of November, the most up-to-date financials we have, Corus has grown its book value from $1.046 billion at the start of the pandemic to $1.303 billion in just six quarters. That’s a 25% improvement in just a year and a half.
So even if the stock price isn’t moving yet, you’re still earning passive income. Plus, the stock continues to get cheaper as Corus improves its fundamentals.
Furthermore, even if you value it by earnings or cash flow, it’s still unbelievably cheap, which is why it’s one of the top Canadian stocks to buy for your TFSA today.
Right now, Corus trades at a forward price-to-earnings (P/E) ratio of 6.1 times and a leveraged free cash flow yield of an incredible 22%.
So it looks as though it’s only a matter of time before Corus rallies back to a fair valuation. And with the company beginning share buybacks, that could happen sooner rather than later.
So if you’re looking to buy a cheap Canadian stock for your TFSA today, there’s no question Corus is one of the top investments to consider.
A top gold stock
In addition to Corus, another cheap Canadian stock to buy for your TFSA today is B2Gold (TSX: BTO)(NYSEMKT: BTG), one of the top gold producers in the world. B2Gold is an ideal investment today for several reasons.
Firstly, gold has a lot of tailwinds in this uncertain environment. As many investors know, gold is a great asset to hold when fear in markets is increasing. The one major issue with gold investors have always had, though, is that holding the precious metal doesn’t provide a yield.
However, a top gold stock can pay an attractive dividend and offer significant upside, which is exactly why B2Gold is the top gold stock to buy for your TFSA today, especially while it’s still cheap. Over the past month, the gold stock has already gained more than 20% in value.
It’s worth noting that one of the main issues that gold stocks will have to deal with over the next year at least is rapidly rising costs. However, B2 Gold is already one of the lowest-cost gold producers, another reason why it’s one of the top stocks to buy for your TFSA today. Plus, with gold prices already rising, B2 Gold has the opportunity to see its profit margins expand.
Right now, the stock trades at a forward enterprise value to EBITDA of just 4.1 times. Furthermore, its forward P/E ratio is just 11.8 times. And of course, most importantly, it returns some of the most attractive passive income of any gold stock. Currently, the dividend yields 3.7%, and that’s after its significant rally over the last month.
So if you’re looking to buy a top Canadian stock for your TFSA while it’s cheap, B2Gold is one to consider right now.
