When the market is rocky, like in 2023, some investors wait for stocks to trade at deep discounts or hit rock bottom before buying. Value investors, however, are on the prowl for stocks trading below their intrinsic or real values.
Today, you can invest in undervalued winners Great-West Lifeco (TSX: GWO), WELL Health Technologies (TSX: WELL), and Rogers Sugar (TSX: RSI). The stocks are doing well because the companies’ strengths help endure the strong headwinds.
Great buy
Great-West Lifeco deserves to be on your buy list due to its resilient, diversified business portfolio. The $32.35 billion international financial services holding company provides life insurance, health insurance, retirement and investment services. It also has asset management and reinsurance businesses.
In the fourth quarter (Q4) of 2022, total earnings increased 34.1% to $1.02 billion versus Q4 2021. Its president and chief executive officer (CEO) Paul Mahon said, “Great-West Lifeco’s fourth-quarter performance was strong against a backdrop of continuing macroeconomic instability.”
As of December 31, 2022, the consolidated assets were $701 billion, and assets under administration (AUA) were $2.5 trillion. The growth from December 31, 2021, for consolidated assets and AUA was 11% and 9%, respectively. Because of the strong momentum and solid financial results, the board approved a 6% increase in the common shareholder dividend. At $34.60 per share (+12.1% year to date), you will delight in the 6.02% dividend.
Back on investors’ radars
WELL Health is up nearly 55% year to date ($4.40 per share) with a strong upside on the horizon. Market analysts recommend a buy rating with 12-month price targets between $7.96 (average) and $13.50 (high). But a year ago, the healthcare stock is losing by 6%.
This $1.09 billion practitioner-focused digital healthcare company should be back on investors’ radars following the record results in Q4 and full-year 2022. WELL chairman and CEO Hamed Shahbazi said, “We had an outstanding year, demonstrating strength across all our key operational and patient metrics.”
The total revenue of $569.1 million in 2022 was 88% higher than in 2021, while Virtual Services revenue rose 154% to $192.4 million year over year. WELL chief financial officer Eva Fong added that 96% of total revenues were either recurring or highly re-occurring in nature.
WELL’s investment pitch is that it’s building shareholder value by demonstrating a rapidly growing and highly predictable tech-enabled enterprise.
Enduring business
Rogers Sugar is a screaming buy, regardless of the economic environment. You’d be investing in an enduring business and a pure dividend play. At $6.01 per share (+5.4% year to date), the dividend offer is a mouth-watering 5.93%.
The $633.89 million saw a strong sugar segment performance to start the year. Mike Walton, president and CEO of Rogers and Lantic Inc., said, “Fiscal 2023 began well as the trends established in 2022 continued to drive strong sugar performance in the first quarter.”
Rogers’s revenues and free cash flow (trailing 12 months) rose 13.3% and 41% year over year to $261.44 million and $57.98 million. Walton expects the ongoing firm demand from the industrial sugar domestic market to sustain in 2023 and the maple segment to recover.
Value for money
Great-West, WELL Health, and Rogers Sugar are ideal choices for value investors. The stocks are winners now but could deliver more when the market stabilizes.
