1 Cheap Canadian Stock to Buy Hand Over Fist Now

This cheap Canadian stock has a well-proven business model with a track record of delivering attractive returns to investors.

| More on:
Wireless technology

Image source: Getty Images

After the recent stock market selloff, it’s not very difficult for investors to find some cheap stocks. But not all cheap stocks have the potential to yield outstanding returns in the long run. That’s why investors must pay attention to the company’s fundamentals and financial outlook before including it in their portfolios. In this article, I’ll highlight one of the best cheap stocks in Canada I find worth buying right now.

BCE Inc stock

The shares of BCE Inc. (TSX:BCE)(NYSE:BCE) have seen a 12% value erosion in the last four months despite its strong financial growth trends and fundamentals — making the stock look cheap to buy now. After losing nearly 10% of its value in 2020 due to the Covid-related setbacks, BCE stock jumped by 21% in 2021.

The largest Canadian communications company currently has a market cap of about $58.8 billion as its stock trades at $64.43 per share, with a 2.1% year-to-date loss. In 2021, nearly 52% of BCE’s total revenue came from the Bell wireline segment, while its Bell wireless segment accounted for nearly 38%.

Last week, BCE announced its largely stronger-than-expected second-quarter results. During the quarter, the company’s total revenue rose by 2.9% YoY (year-over-year) to $5.9 billion as it continued to post strong momentum in wireless and service revenue growth. Meanwhile, the company’s retail internet net activations rose by nearly 28% YoY as it also remains on the path to deliver about 900,000 new fibre locations in the ongoing year. BCE’s adjusted earnings in Q2 rose by 4.8% from a year ago to $0.87 per share — exceeding analysts’ expectation of $0.84 per share.

Spending money to achieve higher growth

In 2022, BCE expects its capital expenditures to be around $5 billion to expand its network of fiber-to-the-home and 5G wireless core networks — marking the highest ever amount invested by a Canadian telecom provider in a single year. By the end of 2022, the company’s total capital expenditure is likely to reach $14 billion since 2020.

While this expenditure figure looks huge at first, these investments are likely to help BCE accelerate its market expansion and customer acquisitions in the coming years. The company expects its new investments to also boost the capacity of its infrastructure and ensure resiliency.

At a time when many large tech companies across North America are witnessing a series of layoffs, BCE is hiring more talent to help it speed up its business expansion efforts. By the end of the year, the telecommunication company plans to hire more than 1,000 team members across Canada with high-tech skills.

Strong dividends

Besides these positive fundamental factors, BCE’s attractive dividends make it one of the best cheap Canadian stocks to consider right now. It currently offers an annual 5.7% dividend yield and distributes its dividends on a quarterly basis.

Given its well-proven business model, robust balance sheet, and strengthening cash flows, you can expect BCE to continue paying solid dividends, which could become a source of reliable passive income for Canadian investors.

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.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »

sale discount best price
Dividend Stocks

1 Dividend Stock Down 11 Percent to Buy Right Now

Do you want a great dividend stock down 11% that can provide years of growth potential? Here's one heavily discounted…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Are you looking for dividend stocks to buy right now? Here are two top picks!

Read more »

edit Taxes CRA
Dividend Stocks

Tax Time: How to Keep More of Your Money

Nearly everyone hates paying taxes, although Canadians can lessen the financial pain with the right tax strategies.

Read more »