If you’re new to investing, you picked a great time to start. With all the market turmoil over the last year, right now is the best opportunity for investors to buy Canadian stocks in years.
It’s common for investors to become disconcerted as markets sell-off. However, if you are buying stocks for the long run and only investing money that you’ve earmarked for the long haul, and not cash you may need in the near term, then stock market sell-offs become some of the best opportunities for investors to buy stocks cheap that can earn you major returns for years to come.
When our hard-earned money is on the line, it’s not uncommon for investors to experience a myriad of emotions through the ups and downs of market movements.
However, if you can keep those emotions in check and focus on buying high-quality stocks and the long-term potential that investing offers, you can set yourself up for years of gains.
So with that in mind, if you’re looking for top Canadian stocks that you can buy right now while they are dirt cheap, here are three of the best to consider for your portfolio.
A top Canadian retail stock to buy undervalued right now
If you’re looking for high-quality stocks to buy now that are trading at a discount, one of the best to consider is Canadian Tire (TSX:CTC.A).
Canadian Tire has been trading undervalued for some time now as investors have been worried about the impacts the retail stock may face in this high-inflation environment.
However, as it has continued to perform well, something we also saw through the pandemic, Canadian Tire has been recovering in recent months, making it one of the top Canadian stocks to buy right now, before it gets any more expensive.
One of the biggest reasons it continues to perform well is that it has an impressive e-commerce platform, in addition to using data analytics and its ultra-popular loyalty program to help drive more foot traffic through its stores and ultimately grow its sales.
Today, it trades at a forward price-to-earnings ratio of just 10.1 times, down from its five-year average of 11.2 times. Furthermore, the stock also offers a dividend yield of 3.8%, as well as consistent dividend growth as it’s constantly increasing its earnings per share each year.
One of the best dividend stocks on the TSX
Another high-quality Canadian stock to buy right now is Freehold Royalties (TSX:FRU), especially if you’re a dividend investor looking to build a significant passive income stream.
Freehold Royalties is one of the best dividend stocks in the energy industry, as it owns the land that other energy stocks use to produce oil and gas. Therefore, it’s constantly earning tonnes of cash flow from these royalty payments, yet has minimal expenses itself. This business model is why it pays such a significant dividend that currently offers a yield of 7.3%.
It’s worth noting, though, that in the short term, Freehold can be volatile as oil prices fluctuate. However, while it may be volatile in the short term, the most important thing for investors is that its dividend remains intact.
And considering how much margin of safety the dividend has, with an expected payout ratio of just below 60% this year, it’s a high-quality stock that investors can have confidence buying and holding for years.
One of the best Canadian stocks to buy right now
Lastly is Brookfield Infrastructure Partners (TSX:BIP.UN), a stock that’s not as cheap as the other two, but it’s also highly defensive and can protect your capital in this uncertain environment.
Many investors will want to balance buying stocks that are cheap with reliable and defensive stocks, especially with so much uncertainty in markets as well as the economy today.
Therefore Brookfield, with its portfolio of defensive infrastructure assets all over the world, as well as its long-term growth strategy, is one of the best Canadian stocks to buy right now.
It’s constantly recycling capital to create more value for investors, can benefit from higher inflation, and pays an attractive distribution with a current yield of 4.6%. Management aims to increase this dividend by 5% to 9% every single year, making it one of the best Canadian stocks to buy now.