As markets continue to sell off, there are countless opportunities for Canadian investors to find stocks to buy at a discount. The TSX just suffered its worst month since the start of the pandemic in June, as it increasingly looks like a recession could be on the horizon.
So, while the market conditions are offering investors the opportunity to buy high-quality stocks at a discount, here are three of the best to buy, each trading at multi-year lows.
A top real estate growth stock
One of the best and most consistent growth stocks you could have owned over the last decade was InterRent REIT (TSX: IIP.UN), a residential REIT with assets in Ontario and Quebec and which just began acquiring properties in B.C.
InterRent’s entire strategy has always been to grow investors’ value as rapidly and efficiently as possible. The REIT pays less of a dividend than many of its peers. However, that extra cash it has retained, it’s put to good work, both expanding its portfolio and investing in existing assets to increase their value and the cash flow they yield.
So, after InterRent has sold off significantly this year, now down roughly 40% off its high, there’s no question it’s one of the best Canadian stocks to buy.
In fact, if you look at its forward price-to-funds-from-operations ratio, InterRent hasn’t traded this cheaply since the start of 2018.
Therefore, if you’re looking for a high-quality real estate stock or a top long-term growth stock, InterRent is one of the best Canadian stocks to buy now.
A massive and dominant agriculture stock that’s recently sold off
Another one of the best Canadian stocks and one to buy after its recent pullback is Nutrien (TSX: NTR)(NYSE: NTR).
Nutrien is a massive producer of key ingredients for fertilizer. This gives it a dominant position in its industry, an industry that’s essential and highly defensive.
Furthermore, in addition to Nutrien’s upstream production, the company is also vertically integrated and owns a massive network of retail stores, which is part of why its economics are so attractive and why it’s one of the best Canadian stocks to buy.
Because it’s also realizing massive tailwinds from the current economic situation and the War in Ukraine, its forward valuation metrics are unbelievably cheap.
However, even if you look at its trailing valuation, before Nutrien was seeing these significant tailwinds, the stock is still trading exceptionally undervalued.
Right now, Nutrien’s enterprise value to trailing 12-month EBITDA ratio is just 6.4 times. That’s the lowest it got during the initial pandemic selloff and the lowest it’s ever been since its inception after the merger of Agrium and Potash Corp.
Therefore, while one of the very best Canadian stocks trades at levels we’ve only briefly seen before, there’s no question that it’s one of the top stocks to buy now.
One of the best defensive stocks for Canadian investors to buy today
Lastly, North West Company (TSX: NWC), an operator of grocery stores and supermarkets, is one of the most defensive stocks in Canada. Yet despite its reliability and resiliency, it too is trading at an attractive discount.
Because it’s so safe, though, it’s naturally a less-volatile stock. So, it’s not surprising that even with the stock selling off, it’s still less than 20% off its high.
Nevertheless, if you’re looking to shore up your portfolio and add a reliable stock and one that pays an attractive dividend, North West might be one of the best Canadian stocks to buy.
Right now, it trades at a trailing price-to-earnings ratio of just 11.4 times. That’s roughly the cheapest it’s ever been in the last 10 years and well below its 10-year average of 17.6 times.
Even looking at its valuation based on its expected future earnings, the stock is cheap. Over the last decade, North West has typically traded at 16.2 times its forward earnings. Today, the stock is valued at just over 12.7 times its forward earnings.
Therefore, while North West is undervalued and offers an attractive dividend yield of 4.3%, it’s certainly one of the best Canadian stocks to buy now.
