2 Canadian Stocks That Are Simply too Cheap to Avoid

These Canadian stocks have fallen far from all-time highs, but that leaves significant value to lock up, as well as dividends.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published February 2, 2023 4:00 pm EST

There’s a reason I use the word “avoid” in this title, rather than ignore. Ignore means you could just look the other way. However, these cheap stocks you simply cannot avoid. They’re going to be thrown in your face over and over again. So you might as well start listening to why these Canadian stocks are such a great buy on the TSX today.

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Brookfield Renewable

If you’re looking for a long-term investment, you simply cannot avoid Brookfield Renewable Partners LP (TSX: BEP.UN) any longer. This is one of the Canadian stocks that are simply too inexpensive after years of dropping.

Now Brookfield stock did have its heyday, when the company reached around $70 per share when President Joe Biden came to office. The then-new president announced changes that included a shift towards renewable and clean energy. And this led Brookfield stock to soar in share price.

Why? Not only does Brookfield stock invest in clean energy in America, it does so all over the world. Plus, it invests in practically every type of clean and renewable energy asset out there. Because of this, the company is a great way to create a diversified clean energy portfolio with just one purchase.

However, shares are down as the company juggles inflation and interest rates. Brookfield continues to try and create new opportunities, while also maintaining a strong balance sheet. Not easily done.

Still, among Canadian stocks, it’s now one of the cheap stocks you just can’t ignore at these levels. It offers a 4.44% dividend yield as of writing and trades at 1.8 times earnings, and earnings are due out this week. So, you could see shares rise as soon as this month! You also have a dividend waiting for you while you hold the stock as well.

CIBC stock

Of all the Big Six Banks, Canadian Imperial Bank of Commerce (TSX: CM) continues to be the one at the lowest end of the poll. Why? Because it’s the most exposed to the Canadian housing market, and that’s proven a problem in the last year. What’s more, it could continue to be a problem in the near future as well.

But rejoice! CIBC stock is now a deal for long-term investors willing to buy now and put on blinders for the next year. Look back at the Great Recession and you’ll see exactly what I mean. That’s when there was a housing crash, and CIBC still managed to come back within a year to pre-fall prices.

This came down to provisions for loan losses, something these Canadian banking stocks all have. And CIBC stock has certainly been using them willingly. That’s good news, as it means when the market returns to normal, CIBC stock will also return to its normal strong position as well.

So right now, investors can lock up CIBC stock’s dividend yield of 5.72% while it trades at just 9.1 times earnings and shares are down about 20% in the last year. Though note, they’re already up 10% in the last month alone.