Investing in stocks is easy and cheap. One can buy shares of several high-quality companies for as low as $50. Yet, while the TSX has several stocks that are trading cheap, it’s important to highlight here that one shouldn’t buy shares based only on the lower dollar price. One should look for fundamentally strong companies with the potential to deliver solid growth in the future.
With this background, let’s look at three no-brainer Canadian stocks you can buy and hold for less than $50.
WELL Health
Shares of digital healthcare company WELL Health (TSX: WELL) could be a solid addition to your portfolio. WELL Health has consistently delivered strong financial performance, despite fears that economic uncertainty and a challenging macro environment could hurt its prospects. While it has grown its top and bottom line at a solid pace, the momentum in its business will likely sustain in the coming years, driven by ongoing omnichannel patient visits.
In addition, the company’s accretive acquisitions and investments in AI (artificial intelligence) will further support its growth by expanding its addressable market and supporting new product development. Also, the continued increase in its high-margin virtual services business will support its growth.
It’s important to highlight that WELL Health is profitable. Further, it generates robust cash flows and appears attractive on the valuation front. WELL stock is trading at a forward enterprise value-to-sales multiple of 1.7, much lower than the historical average. Overall, the digital health solutions provider’s ability to deliver strong growth and a low valuation make it a compelling investment near the current levels.
Telus
From technology, let’s move onto telecom, an essential service for the economy that offers steady growth. Within the telecom space, Telus (TSX: T), with its solid history of delivering profitable growth and ability to enhance shareholders’ returns, remains an attractive investment.
Thanks to its growing cash flows and strong earnings base, Telus has rewarded its shareholders by increasing its dividend 24 times since 2011. Notably, it has paid over $18 billion in dividends since 2004. Looking ahead, Telus, under its multi-year dividend-growth program, intends to grow its annual dividend by 7–10% through 2025. Moreover, at present, it offers a juicy yield of 6.1% (based on its closing price on August 11).
While investors will benefit from Telus’ solid dividend payouts, its growing customer base, low churn, and investments in pure fibre and 5G will drive its future revenue and earnings, and, in turn, its stock price.
StorageVault Canada
The final stock on this list is StorageVault Canada (TSX: SVI). The company is a leading storage provider in Canada and owns and operates 240 locations. Among these, it owns 209 locations plus more than 5,000 portable storage units. It offers last-mile storage and logistics solutions, as well as professional records management services.
The strong demand for rentable storage space remains high, driving the financials of StorageVault. For instance, its top line increased by 25.5% in 2022. Further, the momentum in its business has sustained in 2023, as revenues grew by 12.4% in the first half despite a weak macro environment. Higher sales and a focus on controlling expenses have allowed StorageVault to deliver solid free cash flows and earnings.
Thanks to the steady demand, the company is focusing on expanding its rentable space, which will help maximize revenue. Meanwhile, its focus on increasing its rent per square foot will likely cushion its margins. In addition, its short-duration rentals (weekly or monthly) enable it to manage demand and form a strategic pricing strategy to counter inflation. Overall, StorageVault is a solid stock to own for the long term.
Bottom line
Investors planning to start investing in equities with a small amount of capital could buy shares of Well Health, Telus, and StorageVault. These companies have strong growth prospects. Further, one can buy these three shares together for less than $50.
