The 4 Best Canadian Stocks Under $10 to Buy Today

Canadian small-cap stocks are trading at all-time low valuations! Here are four top stocks below $10 per share that each have huge upside!

| More on:
Dollar symbol and Canadian flag on keyboard

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Canadian small-cap stocks have been taking a serious hit in 2022. As the TSX stock market has continued to decline, plentiful opportunities are showing themselves. Here are four bargain-priced Canadian stocks trading under $10 per share today.

A Canadian ESG stock

H2O Innovation (TSXV:HEO) is becoming a leader in water infrastructure services across the world. When I think of one of the most important resources in the world, it is fresh water. Unfortunately, there is a major deficiency in many parts of the world.

That presents a huge long-term opportunity for H2O. It provides filtration, purification, and wastewater recycling services for utilities, municipalities, and corporations.

After a recent 20% decline, this ESG stock trades for $2.08 per share. It only has a market capitalization of $187 million. Revenue and profit growth are expected in the mid- to high-teens range. However, this Canadian stock only trades for a relatively cheap enterprise value-to-EBITDA (EV/EBITDA) ratio of 10.

A solid dividend-paying energy stock

Another interesting resource stock with a renewable theme is Whitecap Resources (TSX:WCP). Yes, it is a mid-cap Canadian oil and gas producer. However, the company has carbon dioxide sequestration segment that makes its overall operations net carbon negative.

With global oil prices trading consistently above US$100 per barrel, Whitecap has been producing impressive results. In its first-quarter 2022 results, it grew oil production by 38%! Likewise, it saw free cash flow per unit increase 254% to $0.46. That’s a near 5% free cash flow yield in just one quarter!

At $10 per unit, this stock pays an attractive 3.6% dividend. That will likely keep rising if the energy environment remains robust.

A top real estate stock

Another Canadian stock that provides a solid mix of growth, income, and value is European Residential REIT (TSX:ERE.UN). It trades for $4.65 per unit, and it has a market cap of $416 million. Despite becoming one of the largest residential landlords in the Netherlands, this stock trades at a severe discount to other European and Canadian apartment peers.

Yet, it has been demonstrating very solid cash flow growth of about 10% over the past few years. The housing market in the Netherlands is very tight, so European Residential enjoys high occupancy and steady rental rate growth. Likewise, tenants are responsible for almost all property costs, so this REIT has very limited inflation-cost risk.

Today, this Canadian stock pays a 3.4% dividend. It just increased its monthly dividend by 8%, and chances are good the dividend will keep growing into the future.

A cheap Canadian tech stock

If you are looking for cheap Canadian technology stocks, there are plenty to be found today. Sangoma Technologies (TSX:STC)(NASDAQ:SANG) is definitely one to have on your radar. Nearly a year ago, this stock was trading for close to $30 per share. Today, it trades for $10.50 per share.

Sangoma is a leader in unified communication technology solutions. It takes a one-stop-shop approach, providing a broad array of communications services for small- to medium-sized businesses. Despite its stock decline, its business has performed very well through the pandemic.

Through several significant acquisitions, it expects to grow revenues and EBITDA by +70% in 2022. While long-term growth is likely in 15-20% range, this Canadian stock is ultra-cheap with an EV/EBITDA of only 5.7.

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 Robin Brown has positions in H2O Innovation, European Residential REIT and Sangoma Technologies Corporation. The Motley Fool has no position in any of the stocks mentioned.

More on Stocks for Beginners

potted green plant grows up in arrow shape
Stocks for Beginners

1 Canadian Growth Stock That Could Double Your Money in an Economic Recovery

The market downturn is an opportunity to lock growth during the economic recovery. This stock is a blend of value,…

Read more »

edit Safe pig, protect money
Stocks for Beginners

2 Safe TSX Stocks for Beginners to Buy in a Market Correction

These two TSX stocks are still solid long-term buys today, despite the recent market correction.

Read more »

Human Hand Placing A Coin On Increasing Coin Stacks In Front Of House
Stocks for Beginners

3 Real Estate Stocks to Buy for Terrified Investors

Motley Fool investors shouldn't be afraid of investing in real estate if they have a long-term growth strategy, but these…

Read more »

Value for money
Stocks for Beginners

Market Correction: A New List of Value Stocks Just for You

The 2022 stock market has been bearish, with tech stocks being the biggest losers. But tables are turning. It's time…

Read more »

Knowledge concept with quote written on wooden blocks
Stocks for Beginners

3 Reasons Why Inflation Impacts Canadian Stocks

Here are the three most common ways inflation impacts Canadian stocks, why they're selling off, and when you'll want to…

Read more »

Growth from coins
Stocks for Beginners

2 Growth Stocks New Investors Can Buy on the Dip Today

After the recent market correction, many growth stocks look cheap, making it a perfect time for stock market beginners to…

Read more »

Make a choice, path to success, sign
Stocks for Beginners

3 Reasons Cineplex Stock Is a Better Buy Than Air Canada

Although both Air Canada and Cineplex stock are ultra-cheap, here's why the entertainment company is a much better investment.

Read more »

stock data
Stocks for Beginners

Where to Invest $5,000 Amid the Market Selloff

Can you afford to invest $5,000 in stocks right now? If yes, you must consider buying these dirt-cheap stocks amid…

Read more »