Got $1,000? 2 Cheap Stocks to Consider Buying Today

Buy and hold TD Bank (TSX:TD)(NYSE:TD) and another great dividend stud for the long haul.

| More on:
Man holding magnifying glass over a document

Image source: Getty Images.

If you’ve got an extra $1,000 you’ve been meaning to invest but haven’t gotten around to it due to all the volatility we’ve had, now seems like a great time to check out some of TSX stocks that are down and out. They won’t be stuck in a bear market (that’s a 20% fall from peak to trough) forever. Heck, they may already be off to the races with a relief rally that stretches into next year.

Indeed, 2023 is looking like a recession year. Rate hikes may be the tool that inflicts a bit of economic pain. Though there’s no telling how much pain we’ll have to endure, I’d argue that markets have already priced in a lot of the pain. I’d argue that a recession isn’t even a guarantee, given we’re in good hands with the Bank of Canada and U.S. Federal Reserve, who want the best of both worlds (strong employment and tame inflation).

A soft landing may prove tough, but I’d argue that it’s the likeliest scenario, given commodity price depreciation and the supply glut that could be in the cards. If anything, strong disinflationary pressures could be what powers the next leg of the market rally.

At this juncture, I’m a fan of Dollarama (TSX:DOL) and TD Bank (TSX:TD)(NYSE:TD).


Dollarama stock is a great defensive Canadian stock that’s worth every penny of its premium multiple, as we face economic uncertainties. At just shy of $80 per share, the discount retailer’s stock trades at 34.3 times trailing price to earnings (P/E). That’s the highest it’s been in quite a while. Behind the multiple expansion has been some remarkable numbers and resilience in the face of inflation. Further, cash-strapped consumers have flocked to Dollarama to save a few bucks. The environment has allowed Dollarama to take share from pricier rivals in the retail space — a trend that could continue over the next 18 months.

Looking ahead, Dollarama faces greater expectations. Still, management is more than capable of crushing estimates, as it continues to find ways to bolster margins while providing next-level value for shoppers. Dollarama’s strong purchasing power has helped it make the most of a bad macro situation.

As recession strikes, don’t expect Dollarama to fall as hard or as fast as the broader TSX Index. It’s well equipped to thrive in a downturn.

TD Bank

TD Bank is a banking behemoth that I’ve praised ad nauseam of late. The bank is making big deals and it’s not hesitated to put its foot on the gas. With First Horizons and Cowen in the bag, TD Bank could grow its earnings by a much quicker rate. The recession will weigh heavily, but expect TD to walk away as one of the bigger winners from this downturn if it gains approval for its two U.S.-based takeovers.

While I like all of the Big Six Canadian banks right here, TD is a standout as one of the best banks for your buck. It’s the acquisitions that could make a huge difference over the next 10 years and beyond.

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 positions in TORONTO-DOMINION BANK. The Motley Fool has no position in any of the stocks mentioned.

More on Investing

growing plant shoots on stacked coins

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

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

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

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 »