With Economic Growth Slowing, What Are the Best Stocks to Buy Now?

While the market faces strong headwinds and high-quality companies remain cheap, here are two of the best stocks you can buy now!

| More on:
consider the options

Image source: Getty Images

There are many factors impacting the stock market and economy this year. With inflation so high, and interest rates being rapidly increased, there’s no question that the economy is facing massive headwinds. This is why fears of a recession continue to grow and is what makes it difficult for investors to decide on what the best stocks to buy are today.

However, just as we should always be looking for the best business to buy and ones that we can own for the long haul, in this environment, it’s even more important to find long-term investments that we can have confidence in.

This market environment is certainly making it harder for companies to grow. And depending on what industry or sector they operate in, the headwinds can be even more significant.

But the best Canadian companies will continue to find ways to operate in the new environment while consistently expanding operations. And the best stocks to buy will be these high-quality companies that you can buy undervalued today and hold for the long haul, as they rally back to fair value and simultaneously continue to grow their earnings.

So, with that in mind, here are some of the best stocks to buy now in this highly opportune environment.

One of the best long-term stocks to buy now and hold forever

There’s no question that Nutrien (TSX:NTR)(NYSE:NTR) is an incredible company and an excellent long-term investment. So, the fact that it’s pulled back from its highs and offers attractive value today certainly makes it one of the best stocks you can buy now.

First and foremost, it’s a massive company with a dominant position in its industry. And the agriculture industry in which it operates is one that’s not only crucial to the economy but it’s also constantly growing over the long run.

And while Nutrien is a massive producer of key chemical ingredients for fertilizer (it’s the largest producer of potash in the world and the third-largest producer of nitrogen), that’s nowhere near all that the company does. In fact, it has vertically integrated operations that include over 2,000 locations in its retail network, which only help Nutrien to be more profitable.

This is why Nutrien is one of the best stocks to buy and hold for the long haul. It’s highly defensive but also offers incredible long-term growth potential. And right now, the stock is trading at an unbelievably attractive valuation.

After falling nearly 25% from its high, and even after analysts lowered their forward estimates following Nutrien’s recent earnings report, the stock still trades at a forward enterprise value (EV) to EBITDA ratio of just 4.05 times. That’s incredibly cheap, especially for a high-quality and reliable stock of Nutrien’s nature.

In fact, since the merger of Agrium and Potash Corp to form Nutrien at the start of 2018, Nutrien’s average EV-to-EBITDA ratio has been 8.4 times. Therefore, it’s incredibly cheap today and is easily one of the best stocks to buy now.

A top defensive growth stock

Another high-quality investment that you can buy and hold for the long run, and one of the best stocks to buy now while it’s cheap, is GFL Environmental (TSX:GFL)(NYSE:GFL).

GFL Environmental is the fourth-largest environmental services company in North America. That means it has a strong and dominant position in an industry that’s essential and, therefore, highly defensive.

In addition to the fact the GFL is a reliable stock that you can buy and hold for the long haul, though, it’s also a stock that has proven to grow rapidly, both organically and by acquisition. Therefore, while the stock trades well off its high and offers attractive value, there’s no question it’s one of the best stocks to buy now.

Since going public in early 2020, GFL has had an average EV-to-EBITDA ratio of 12.9 times. Today, GFL trades at an EV-to-EBITDA ratio of just 11.8 times. Plus, in the two-and-a-half years that GFL has traded publicly, the only time it offered more value than now was briefly at the end of 2020 for a few months.

Therefore, while this outstanding defensive growth stock trades undervalued, it’s undoubtedly one of the best stocks to buy now.

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 Daniel Da Costa has positions in Nutrien Ltd. The Motley Fool recommends Nutrien Ltd.

More on Investing

Plant growing through of trunk of tree stump
Investing

2 of the Best TSX Growth Stocks to Buy in October

One has to be extra careful while picking growth stocks in this rising-rate environment.

Read more »

Bank sign on traditional europe building facade
Bank Stocks

2 TSX Bank Stocks Worth a Long-Term Bet Right Now

Here's why Toronto-Dominion Bank (TSX:TD)(NYSE:TD) and Royal Bank of Canada (TSX:RY)(NYSE:RY) are two top bank stocks to buy now.

Read more »

Dividend Stocks

Passive Income: 2 Dependable Dividend Stocks to Buy Today and Own Forever

Now’s a great time to think about building a passive-income stream. Here are two dividend stocks to have on your…

Read more »

Dividend Stocks

3 Dirt-Cheap TSX Stocks (With +5% Yields) to Buy Right Now

Here are three dirt-cheap TSX stocks that trade with elevated dividend yields and solid growth prospects ahead.

Read more »

sale discount best price
Dividend Stocks

TFSA Investors: 2 Cheap TSX Stocks to Buy Now for Passive Income

Top TSX dividend stocks are now on sale for TFSA investors seeking passive income.

Read more »

exchange traded funds
Dividend Stocks

3 High-Yield Canadian Dividend ETFs to Buy and Hold Forever

These funds provide a all-in-one portfolio of top Canadian dividend stocks.

Read more »

close-up photo of investor Warren Buffett
Investing

3 Canadian Stocks Warren Buffett Has Owned: 1 Will Surprise You!

Warren Buffett has owned Canadian stocks like Suncor Energy (TSX:SU)(NYSE:SU) and others.

Read more »

woman data analyze
Investing

These 3 Value Stocks Are Worth 50% More Than Their Market Prices

Undervalued stocks, like RioCan REIT (TSX:REI.UN), could surge back to thier long-term averages.

Read more »