Canadians may be hoarding cash right now rather than investing, and it would be completely reasonable given the current market conditions. Shares continue to trade downwards for some of the best companies out there. Yet the downturn also presents a huge opportunity, especially for value stocks that you could hold for decades.
Value stocks are those companies that have strong fundamentals and a strong future, yet trade far below their intrinsic value. So if you’re looking for stocks in this category, these are the three I would pick up today.
Teck Resources
Teck Resources (TSX: TECK.B) is a strong choice among value stocks. The company has decades of growth behind it from mining essential commodity products. This includes steel-making coal, silver and copper, and even fertilizers. Plus, the miner has a strong balance sheet, made even stronger from a recent sale that brought in about half a billion dollars.
This caused shares of Teck stock to rise this year, and yet it’s still one of the strongest value stocks out there. TECK stock trades at just 5.4 times earnings, allowing you to lock in a 1.12% dividend yield as well. With shares up 26.5% year to date, you get some protection as well during this market downturn.
BMO stock
Among the value stocks that investors should consider are the Big Six Banks, but specifically Bank of Montreal (TSX: BMO). BMO stock is in a growth phase after purchasing Bank of the West in the United States. This exposure to the U.S. is of great interest during this market downturn, as America tends to recover faster during a recession, should we go into one.
BMO stock therefore offers decades of historical growth, provisions for loan losses during a recession, and stellar dividends. It trades at 7.9 times earnings and holds a 4.21% dividend yield as of writing. Plus, shares are up 1.3% year to date, which is better than its other Big Six Bank peers.
TFI stock
Finally, TFI International (TSX: TFII) is another superior choice among value stocks with a strong past and even stronger future. The company also has decades of growth behind it in the trucking industry. But as you’re likely aware, e-commerce growth has created an intense need for shipping, and here, TFI stock has benefitted greatly.
And yet again, it’s one of the value stocks trading at just 13.5 times earnings. So again you can gain a 1.34% dividend yield through this investment as the company continues to post earnings that beat out estimates. The stock has climbed about 12% in the last month alone, but is still on par with where it was in January. So you can still claim a solid buy today.
Bottom line
These three value stocks have done well for decades, each climbing higher and higher at a steady clip. Yet, they remain a solid deal today based on their future potential. Each will continue to do well in the years to come, which is why I would certainly consider them if you have $5,000 set aside.
