3 Incredibly Cheap TSX Stocks I’d Buy in the Market Correction

Here are three incredibly cheap TSX stocks to load up on during the current stock market correction.

| More on:
Target. Stand out from the crowd

Image source: Getty Images

Stock market corrections are ideal times to buy stocks in great businesses at very cheap prices. With the TSX Index down 7.5% in 2022, it is hitting correction territory. If it weren’t for Canada’s large exposure to oil and gas stocks, the broader TSX would likely be much lower this year.

If you have an iron stomach and a long investment horizon (five years or more), the market correction is a great opportunity to fill your portfolio with top-quality stocks. Here are three stocks I’d consider picking up on the dip.

A top TSX income stock

As with most real estate stocks, BSR REIT (TSX:HOM.U) has pulled back significantly. It is down 16% in 2022. This real estate investment trust (REIT) owns a portfolio of well-located, garden-style apartment properties in Texas and Oklahoma.

In its first quarter of 2022, BSR grew its adjusted funds from operation (AFFO) (a core measure of real estate profitability) by 81% over last year! The value of its properties increased 66% on a per-unit basis. Its properties are located in some of the fastest-growing markets in America. Consequently, it is seeing market-leading rent growth.

Despite that, it is one of the cheapest apartment REITs you will find. It has a great management team, high-quality assets, and pays an attractive 3.4% dividend yield. For value, income, and growth, this is a great TSX stock to buy and hold for the long-term.

A top Canadian blue-chip stock

Canadian railroad stocks have been great blue-chip stocks to buy and hold for years and decades. They have limited competition, great pricing power, and provide economically essential transportation services. Consequently, their businesses are very resilient over long periods of time.

This year, Canadian National Railway (TSX:CNR)(NYSE:CNI) is down 8%. This TSX stock is trading with an elevated dividend yield of 2% right now. Its historic average yield is closer to 1.6%. This indicates that there might be some value in the stock at current prices.

CN Rail stock is never “cheap.” However, it might be undervalued today. Any major dip in the past 10 year has been an attractive chance to add this stock to your portfolio. For a steady, long-term compounder, CN is a great stock to buy on the dip and tuck away for the long term.

A top TSX growth stock

Some of the best value in the market today might be within Canadian growth stocks. Both profitable and unprofitable businesses are being “thrown out with the bath water.” This valuation reset is creating long-term opportunities. One growth stock I really like is BRP (TSX:DOO)(NASDAQ:DOOO). This TSX stock is down almost 25% this year.

With a price-to-earnings ratio of only six, this stock is incredibly cheap. BRP stock is the cheapest its valuation has ever been (other than during the pandemic crash).

BRP is one of the largest sellers of recreational vehicles and boats in the world. Certainly, these are discretionary products that could be impacted if we hit a recession. Yet the company continues to see strong demand. It has a long history of innovation, good management, and strong annual double-digit returns.

If you are looking to be opportunistic and contrarian, this cheap growth stock could have significant upside if negative economic headwinds start to reverse.

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 BRP INC and BSR REAL ESTATE INVESTMENT TRUST. The Motley Fool recommends BSR REAL EST INVST and Canadian National Railway.

More on Stocks for Beginners

oil and gas pipeline
Energy Stocks

Why Tourmaline Oil Stock Just Fell to 52-week Lows?

The recent correction in Tourmaline Oil stock could be an opportunity.

Read more »

Credit card, online shopping, retail
Stocks for Beginners

TFSA Investors: How to Tackle Debt for Good and Come Out on Top

If you have tons of debt and it's become overwhelming, using the "snowball method" can certainly help you tackle it,…

Read more »

tsx today
Stocks for Beginners

TSX Today: What to Watch for in Stocks on Tuesday, March 21

TSX investors may want to closely monitor the latest domestic inflation report today.

Read more »

A airplane sits on a runway.
Stocks for Beginners

Are Airline Stocks a Good Buy in March 2023?

Few companies have felt the pandemic as much as airlines. But now that markets are open, are airline stocks a…

Read more »

Woman has an idea
Tech Stocks

3 No-Brainer Stocks to Buy for Less Than the Cost of 1 Tesla Share

Are you confused as to whether to buy Tesla shares? Here are three no-brainer stocks that can give you exposure…

Read more »

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

2 “Bargain” TSX Stocks I’m Not Touching—and What I’d Buy Instead

Are you hunting for bargain stocks to make money from the recovery rally? Remember, not all stocks trading near their…

Read more »

Woman has an idea
Stocks for Beginners

The Best TSX Stocks to Invest $1,000 in March 2023

Do you have $1,000 to invest in March? Here are some ideas on how to use recent market drama to…

Read more »

financial freedom sign
Stocks for Beginners

2 TSX Stocks With Millionaire-Maker Potential

Here are two of the best TSX growth stocks you can buy now to expect eye-popping returns on your investments…

Read more »