Bear Market: 4 Undervalued TSX Stocks to Add Today

Investors should take advantage of this bear market and snatch up cheap TSX stocks like Algonquin Power & Utilities Corp. (TSX:AQN)(NYSE:AQN).

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The S&P/TSX Composite Index was up 145 points in early afternoon trading on June 21. The TSX Index fell into a bear market after plunging sharply to open the previous week. Today, I want to look at four TSX stocks that have fallen into undervalued territory at the time of this writing. Let’s jump in.

This top REIT is worth snatching up in a bear market

Dream Office REIT (TSX:D.UN) is a Toronto-based real estate investment trust (REIT) that owns and operates office properties in major urban areas across Canada. This is a solid target, as Canadians have steadily gone back to the workplace in 2022, as the pandemic looks to be in the rear-view mirror. Shares of this REIT have dropped 19% so far this year.

Diluted funds from operations (FFO) per unit rose marginally to $0.39 in Q1 2022. Meanwhile, it reported net income of $52.3 million. This TSX stock possesses a very favourable price-to-earnings (P/E) ratio of 5.6. It offers a monthly dividend of $0.083 per share, which represents a strong 5% yield.

Commodities have slipped, but I’m still looking to buy this TSX stock

Russel Metals (TSX:RUS) is a Toronto-based metals distribution company. This TSX stock has plunged 20% in 2022. Metals commodities were on a tear in 2021 and to start 2022. However, that has fallen off sharply in the face of this bear market.

In Q1 2022, the company reported revenues of $1.33 billion — up from $1.14 billion in the previous year. Meanwhile, net earnings fell marginally to $99 million, or $1.56 per share. This TSX stock also possesses a very attractive P/E ratio of 3.7. It last paid out a quarterly dividend of $0.38 per share. That represents a very strong 5.7% yield.

Here’s another cheap TSX stock to buy in this bear market

Toromont Industries (TSX:TIH) provides specialized capital equipment in North America and around the world. Its shares have dropped 13% so far in 2022. That has pushed the stock into negative territory in the year-over-year period.

The company released its first-quarter 2022 results on April 27. It delivered revenue growth of 7% to $860 million. Meanwhile, net earnings climbed 24% year over year to $59.5 million, or $0.72 on a per-share basis. It achieved solid earnings even though bookings were down 16% from the first quarter of 2021.

This TSX stock last had a solid P/E ratio of 23. It currently possesses an RSI of 25, which puts Toromont in technically oversold territory. The stock last paid out a quarterly dividend of $0.39 per share, representing a modest 1.5% yield.

Seek exposure to green energy with this undervalued TSX stock

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) is the fourth TSX stock I’d look to snatch up in this bear market. This Oakville-based company owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets in North America, Chile, and Bermuda. Shares of this TSX stock are down 6.3% in the year-to-date period.

In Q1 2022, Algonquin reported total revenues of $735 million — up 16% from the prior year. Meanwhile, adjusted net earnings increased 13% and 5%, respectively, to $141 million, or $0.21 per share. Adjusted EBITDA jumped 17% to $330 million. This TSX stock has an RSI of 29, putting Algonquin in oversold levels. It also offers a quarterly dividend of $0.181 per share. That represents a strong 5.5% yield.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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