As uncertainty continues to dominate markets, countless Canadian stocks are trading undervalued, giving investors the opportunity to buy these companies ultra-cheap right now.
And while many still expect a recession, nobody can accurately predict what will happen over the coming months and quarters.
It’s important to recognize that while there are plenty of options for investors, these discounts won’t last forever. Therefore, if you have cash to invest, you’ll want to take advantage of these opportunities sooner rather than later.
It’s also important to consider adding stocks that have recovery potential in the near term or can at least begin to earn you attractive passive income right away. These are far better investments than buying a stock just because it’s extremely cheap, but it may take years to turn its business around and see a recovery in its stock price.
With that in mind, if you’ve got cash to invest today, here are two of the best stocks to buy right now.
One of the best and cheapest stocks on the TSX to buy right now
Despite the significant recovery in operations that Cineplex (TSX:CGX) has been seeing this year, and especially in the last month, its stock price has struggled to gain momentum, giving investors a chance to buy one of the best recovery stocks on the market right now.
Cineplex is still trading at the ultra-low levels it bottomed at during the pandemic. However, in 2023 we’ve seen a significant recovery in its operations, especially as the Hollywood film industry has recovered and new blockbuster movies are being released.
There is some risk that a prolonged strike could impact the film industry again, but even that is still a long shot at this point. Plus, with the stock trading unbelievably cheap, it offers too much value to ignore.
Right now, with Cineplex stock trading around $8.65 at the time of writing, it trades at just 8.7 times its earnings over the next four quarters. Furthermore, Cineplex trades at a forward enterprise value (EV) to earnings before interest, taxes, depreciation and amortization (EBITDA) ratio of just 6.1 times.
For comparison, in the three years leading up to the pandemic, Cineplx traded with an average forward EV/EBITDA ratio of 10 times and an average price-to-earnings ratio of 26.4 times.
Therefore, Cineplex stock is still trading unbelievably cheap today, making it one of the best stocks to buy right now or, at the very least, add to your watchlist.
One of the top stock picks for dividend investors
While Cineplex is one of the best stocks to buy right now and offers significant recovery potential, if you’re a dividend investor looking to boost your passive income or just want to buy a more reliable, blue-chip stock, one of the best to consider is Enbridge (TSX:ENB), the massive energy infrastructure stock.
Enbridge stock has been slowly falling in price over the last 12 months and now trades nearly 20% off its 52-week high, giving investors the opportunity to not only buy the stock undervalued but also lock in a higher-than-normal dividend yield.
Today, Enbridge stock offers a yield of roughly 7.5%. Meanwhile, its average yield of the last decade has been 5.5%. More recently, in the last three years, it’s averaged 6.95%.
Investors can buy Enbridge, one of Canada’s largest and most reliable dividend stocks, while it trades undervalued; it’s one of the best stocks to buy now.
Not only does it offer an attractive dividend yield, but Enbridge has also increased its dividend each year for 27 consecutive years.
Furthermore, its dividend should be ultra-safe considering that Enbridge is paying out $3.55 per share this year, yet it expects to earn distributable cash flow (DCF) per share between $5.25 and $5.65.
Even if the stock only managed to hit the bottom end of its guidance range and earn $5.25 of DCF per share, Enbridge’s payout ratio would still only be 68%.
Therefore, if you’ve got cash that you’re looking to put to work today, Enbridge is certainly one of the best stocks to buy, especially if you’re looking to boost your passive income.
