When the markets are struggling, and stocks appear to only continue to lose value, it can seem like these environments may last forever. However, as history has shown us, a struggling market or economic environment will eventually recover, making now an opportune time to buy some of the best stocks on the TSX.
It’s extremely difficult to tell when the market will recover and to buy stocks right at the bottom of the market.
Therefore, when a high-quality stock trades at a price that’s too good to pass up, it’s essential to take advantage. And of all the top stocks on the TSX trading ultra-cheap today, here are three of the best to buy now.
A top telecommunication stock
Rogers Communications (TSX:RCI.B) has been one of the best and most undervalued stocks to buy for a while now. Even before its acquisition of Shaw closed, Rogers was trading much cheaper than its industry competitors.
Now that the deal has closed, though, it offers even more potential as its footprint in Canada has grown, but also it has the potential to realize a tonne of cost synergies, which should help improve its profitability immensely.
In fact, management has said that it believes Rogers could see up to $1 billion in operating expense savings as a result of the acquisition, which would help Rogers’s earnings and free cash flow to increase considerably.
Therefore, considering the stock was already priced attractively, Rogers is easily one of the best stocks to buy now before the market turns around.
It’s also worth noting that many analysts have increased their target prices for Rogers since the acquisition was approved. And today, its average analyst target price is just under $78 — a roughly 20% premium to its current market price.
Therefore, while this high-quality, blue-chip stock trades cheaply in this environment, Rogers is one of the top stocks to buy for your portfolio before an eventual market recovery.
This impressive retail stock is one of the best to buy now
Another high-quality stock that trades cheaply today and that you can buy and hold for years is Aritzia (TSX:ATZ).
Aritzia has been an impressive growth stock in recent years, especially through the recession. And on top of its impressive past performance, the stock continues to have significant growth potential going forward.
Its popularity continues to grow south of the border, thanks in large part to its marketing strategy and the fact that it continues to open the majority of its boutiques in the United States. Even with this recent expansion south of the border, though, the majority of its locations are still in Canada, giving Aritzia a tonne of growth potential over the coming years.
Therefore, the fact that it’s trading well off its highs and below its historical averages gives investors the opportunity to buy one of the top growth stocks on the market at an unbelievable valuation.
Currently, Aritzia trades at a forward price-to-earnings (P/E) ratio of just 21 times. For comparison, its average P/E ratio over the last five years is 36.1 times. Furthermore, the stock is expected to see its earnings per share (EPS) grow by over 15% in each of the next two years, making it one of the best stocks that you can buy right now.
A top Canadian bank stock
Lastly, while many of the high-quality Canadian bank stocks, such as Toronto-Dominion Bank (TSX:TD), trade well off their highs, investors have an excellent opportunity to buy these stocks now and hold for years.
Canadian bank stocks are some of the best long-term investments you can make, because they are well managed, extremely resilient, and constantly growing their businesses over the long haul.
In fact, in just the last five years, TD has increased its normalized EPS by over 50%. That’s impressive growth for a stock with a market cap north of $145 billion.
Furthermore, today TD trades at a forward P/E ratio of just 8.9 times, which is below its five-year average of 11.1 times.
Therefore, while this core portfolio stock trades at such a compelling valuation, and while its dividend yield is above 4.75%, TD is one of the best stocks to buy right now.
