Buy the Dip: 3 TSX Stocks to Buy Today and Hold for the Next 3 Years

Canadian investors may want to buy the dip in promising TSX stocks like Stantec Inc. (TSX:STN)(NYSE:STN) and others before the summer ends.

| More on:
Target. Stand out from the crowd

Image source: Getty Images

Editor’s note: Valuation metrics and dividend data have been corrected for Canadian Tire. The correct figures are below.

The S&P/TSX Composite Index climbed 187 points to close out the previous week on Friday, August 12. Canadian markets have bounced back nicely in the second half of July and the first half of August. However, there are still many TSX stocks that have not rebounded from the volatility that plagued the late spring and early summer. Today, I want to look at three equities that are worth buying on the dip and hanging onto in the years ahead. Let’s dive in.

Why I’m looking to snatch up Stantec on the dip this summer

Stantec (TSX:STN)(NYSE:STN) is the first TSX stock I’d look to buy the dip in today. This Edmonton-based company provides engineering, architecture, and environmental consulting services in the areas of infrastructure and facilities in North America and around the world. Its shares have dropped 7.5% in 2022 as of close on August 12.

Fortunately, Stantec has already gained some momentum in recent weeks. Indeed, the stock has increased 14% over the past month. That means investors can buy into a dip that already looks like it has started the comeback. The company released its second-quarter 2022 results on August 10. It posted net revenue growth of 22% to $1.1 billion. Meanwhile, adjusted net income jumped 33% year over year to $92.6 million.

This TSX stock possesses a price-to-earnings (P/E) ratio of 37, which puts it in solid value territory compared to its industry peers. It offers a quarterly dividend of $0.18 per share, which represents a modest 1.1% yield.

Here’s a TSX stock that offers the Brookfield advantage

Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) is a Toronto-based alternative asset manager and real estate investment trust (REIT)/real estate manager. It focuses on real estate, renewable power, infrastructure, and venture capital and private equity assets. Shares of this TSX stock have plunged 10% in the year-to-date period. This stock has also gained momentum over the past month, rising 17% as of close on August 12.

The company unveiled its second-quarter 2022 earnings on August 11. Over the last 12 months, Brookfield has delivered net income of $10.6 billion — up from $8.56 billion over the previous 12-month stretch. Meanwhile, distributable earnings before realizations rose to $3.88 billion compared to $3.10 billion in the prior year.

Shares of this TSX stock last had a favourable P/E ratio of 23. It offers a modest quarterly dividend of $0.14 per share.

This TSX stock is worth buying on the dip for its value and dividend

Canadian Tire (TSX:CTC.A) is the final TSX stock I’d look to snatch up on the dip in the middle of August. The Toronto company provides a wide range of retail goods and services across Canada. This TSX stock has dropped 13% so far in 2022. Its shares suffered a steep drop in June.

In the second quarter 2022, Canadian Tire reported consolidated comparable sales growth of 5%. Shares of this TSX stock currently possess an attractive P/E ratio of about 9. Better yet, it offers a quarterly dividend of $1.625 per share, which represents a yield of 4%.

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 recommends Brookfield Asset Management Inc. CL.A LV.

More on Investing

growing plant shoots on stacked coins
Investing

Got $5,000? 3 Stocks to Hold for the Next 20 Years

Given their high-growth potential and solid growth initiatives, these three stocks are excellent additions to your long-term portfolio.

Read more »

money cash dividends
Investing

TFSA Passive Income: Make $455/Month Tax Free for Life

Canadian investors can churn out big passive income in their TFSA with stocks like Freehold Royalties Ltd. (TSX:FRU) and others…

Read more »

Natural gas
Energy Stocks

Canadian Natural Resources Stock (TSX:CNQ): Profiting From Natural Gas Strength

Soaring cash flows and dividends have come to characterize Canadian Natural Resources stock as well as other natural gas stocks.

Read more »

Question marks in a pile
Investing

Uranium Stocks: Ready for a Breakout?

Uranium mining stocks like Cameco Corporation (TSX:CCO)(NYSE:CCJ) could be ready for a breakout.

Read more »

grow dividends
Dividend Stocks

1 Cheap Stock to Turn a $20,000 TFSA Into $267,000

If you're looking to boost your TFSA, you need a cheap stock that you can hold for decades. And I…

Read more »

Profit dial turned up to maximum
Investing

This Little-Known TSX Stock Has Huge Potential

From new technologies to unglamorous but promising service businesses, there are plenty of potentially explosive, little-known stocks trading on Canadian…

Read more »

Canadian Dollars
Stocks for Beginners

How a $10,000 TFSA or RRSP Investment Can Become $193,000

Are you looking to build wealth for retirement? Here's one way that turned a $10,000 TFSA or RRSP investment into…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

2 of the Best Monthly Passive-Income Stocks to Buy in Canada Right Now

Here are two of the best Canadian monthly passive income stocks you can consider buying right now to hold for…

Read more »