Market volatility and sell-offs, while unfortunate, are natural. The economy naturally cycles as well, which is what many are expecting in this economic environment. Unsurprisingly, much of the focus from Canadian investors is on what’s happening to their stocks and the value of their portfolios today. Instead, we should focus on the opportunities these environments create to buy stocks at a discount.
Using this market environment to buy long-term stocks while they trade below their fair value can set you up for years of capital gains. So if you’ve got cash to invest in Canadian stocks today, here are three of the best you can buy for less than $20 a share.
A high-quality Canadian real estate stock to buy and hold for years
With rapidly rising interest rates impacting the prices of real estate assets across the country, as well as the value of real estate stocks, InterRent REIT (TSX: IIP.UN) has become undervalued, making it one of the best Canadian stocks to buy now.
InterRent owns residential properties in Ontario, Quebec, and B.C. The REIT is constantly looking for more acquisitions to expand its portfolio.
It’s one of the best Canadian stocks you can buy and hold long-term because real estate is a defensive industry, and occupancy rates will always be high. At the same time, though, InterRent is an impressive growth stock that’s constantly increasing the value of the REIT for investors.
Over the last 10 years, for example, it has increased its annual rental revenue from $47.5 million to $210 million, an increase of more than 300%.
Investors earned a total return of more than 200% over the decade, even with the significant pullback over the last year.
Therefore, while this high-potential, long-term growth stock is trading undervalued, it’s one of the best Canadian stocks to buy now.
A top Canadian gold stock paying an attractive dividend and trading undervalued
Another high-quality Canadian stock that you can buy undervalued today is B2Gold (TSX: BTO), the high-quality gold producer.
B2Gold is one of the most attractive stocks in the gold sector due to its long track record of strong execution and production growth. In addition, it has some of the lowest-cost operations. This operational fitness gives it attractive margins and a competitive advantage over many of its peers.
Those margins allow it to pay a dividend with a yield of just under 5%, easily one of the highest dividend yields of any metals and mining stocks.
And if that’s not enough, B2Gold recently announced a $1.1 billion acquisition. Some analysts believe it can help contribute roughly $500 million in cost synergies to its operations almost immediately.
Therefore, while the gold sector is still out of favour and potentially on the verge of a significant rally, B2Gold is one of the top Canadian stocks to buy today.
An ultra-cheap stock that could rebound in the coming months
Lastly, if you’re looking to buy stocks as cheaply as possible in this environment, one of the best Canadian stocks you can consider is Cineplex (TSX: CGX) before it eventually recovers.
Cineplex stock is still trading cheaply after being impacted by the pandemic. However, with indoor capacity restrictions gone, a tonne of blockbuster films set to be released in 2023, and occupancy levels returning to normal, Cineplex has tremendous potential to start its recovery soon.
For example, for all of 2022, Cineplex’s box office was just 65% of its pre-pandemic numbers. However, already in January of 2023, box office numbers were 88% of pre-pandemic sales, showing a noticeable recovery.
In total, for 2022, Cineplex managed sales of around $1.3 billion. That’s expected to grow by another 22% this year to almost $1.6 billion. Furthermore, Cineplex’s profitability is expected to increase significantly as well.
So with Cineplex stock trading at a forward enterprise value (EV)-to-earnings before interest, taxes, depreciation and amortization (EBITDA) ratio of just 6.7 times, it’s one of the best Canadian stocks you can buy.
Not only did it trade at an EV/EBITDA ratio of 9.5 times prior to the pandemic, but its EBITDA is expected to grow considerably as it recovers over the next few years. In such impressive financial health, the stock has strong potential upside.
