2 TSX Stocks You Can Buy for Under $20 a Share

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) stock is a dividend juggernaut that’s too cheap at under $20 per share.

| More on:
A close up image of Canadian $20 Dollar bills

Image source: Getty Images

Low-cost TSX stocks may seem cheap with more upside relative to the higher-priced blue chips out there. But that simply is not the case. Though lower-cost stocks allow smaller retail investors to gain more shares, investors should not mistake the price of a stock with its value. In any case, low-cost stocks tend to be indicative of small- or mid-cap stocks or stocks that have fallen too hard, too fast.

Currently, I’m a big fan of the mid-cap space, as Mr. Market tends to be slightly less precise at pricing them at close to their intrinsic value (or their true worth). In this rocky market, the mid-cap space could be key to outperforming the broader TSX Index. I’d encourage new investors to embrace mid-caps, especially those with lower share prices, but to put in the extra homework due to the propensity for mid-caps to overshoot in both directions.

Simply put, mid-cap investing is a great way to achieve superior risk-adjusted returns. That said, there’s no excuse for not putting in due diligence prior to purchase.

Without further ado, let’s have a look at two mid-cap stocks that investors can pick up for south of $20 per share at writing. Each name has a low share price and appears valued attractively following damage endured in the first half of 2022.

Storage Vault Canada

Storage Vault Canada (TSX:SVI) is a $2.46 billion self-storage firm whose shares go for just $6 and change at writing. Undoubtedly, StorageVault is a smaller mid-cap, but it’s one that’s far stabler than most large caps. The business of storage units is pretty easy to understand. In Canada, Storage Vault has done a great job of expanding and providing self-storage and portable storage services in target markets where they’re needed.

Over the past year, the stock is up over 20%. More impressively, shares are up more than 181% in the last five years, all while exhibiting a bit less volatility than the broader market (0.83 beta).

Storage Vault recently delivered solid earnings, with nearly 14% growth in same-store net operating income (NOI). Adjusted funds from operations (AFFOs) — the equivalent of operating cash flows for REITs — rose 29%.

Indeed, the beat was robust, leading National Bank to hike its price target to $7.50.

Even with a recession, SVI seems difficult to stop amid “very strong” demand.

Algonquin Power & Utilities

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) is a renewable energy kingpin that’s fallen on hard times amid rising interest rates. Shares used to be a darling in TFSA portfolios, offering the perfect mix of capital gains and dividend growth. These days, the capital gains have stopped coming in, with the stock going virtually nowhere since the end of 2019. It’s been a rocky road, but the 5% dividend yield is still well covered and subject to above-average growth moving forward.

Recently, management reaffirmed guidance, with adjusted EPS (earnings per share) to fall into the $0.72-0.77 range. With a mere 1.7 times price-to-book, slightly below industry averages, I view Algonquin as a top-two stock pick at $18 and change per share.

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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Investing

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, June 20

After surging to fresh record highs last month, the TSX Composite benchmark currently trades at its lowest level since February…

Read more »

Target. Stand out from the crowd
Dividend Stocks

3 Monthly-Paying Dividend Stocks That Are Screaming Buys Right Now

These three monthly-paying dividend stocks are excellent additions to your portfolios.

Read more »

A bull outlined against a field
Stocks for Beginners

Top 5 Sectors to Watch in a Bullish Market

Do you want growth in a bull market? These aren't just the sectors to watch but the stocks that should…

Read more »

Growing plant shoots on coins
Dividend Stocks

TFSA Set and Forget: 1 Dividend-Growth Superstar for the Long Run

Manulife Financial (TSX:MFC) stock is in the zone, with dividend hikes and big buybacks likely in the cards.

Read more »

little girl in pilot costume playing and dreaming of flying over the sky
Dividend Stocks

For a Shot at $6,228/Year in Passive Income, Buy 755 Shares of This TSX Stock

Looking for passive income? You'll need to look beyond only dividends. Which is why EIF stock could be one of…

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

TFSA Investors: 2 Dividend Stocks I’d Buy and Hold Forever

These two stocks could provide long-term investors multi-year returns of more or less 10% per year

Read more »

crypto, chart, stocks
Dividend Stocks

Why Waste Connections Stock Keeps Going Up

Waste Connections stock (TSX:WCN) continues to hit all-time highs. But is more on the way, or is an investment wasteful?

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

A Dividend Giant I’d Buy Over Suncor Stock

Suncor Energy is a blue-chip TSX dividend stock that offers you a tasty yield. But this TSX dividend giant is…

Read more »