Most investors remained focused on market volatility. That’s a shame because that volatility has pushed some stellar stocks into discount territory. Those stocks aren’t to be ignored! They are great, cheap stocks to buy right now and potentially hold for the longer term.
Even better, you don’t need a fortune to start with. Here’s a look at two of those cheap stocks to buy right now for your portfolio with just $5,000.
Tune in to this stock for long-term growth
Rogers Communications (TSX:RCI.B) is one of Canada’s big telecoms. Actually, let’s rephrase that. Rogers is one of the biggest, if not the biggest, of Canada’s telecoms, depending on how you measure size. Rogers recently completed the acquisition of Shaw Communications in a multi-billion-dollar deal that established it as a behemoth with true coast-to-coast wireless and wireline coverage.
More importantly, the acquisition brings with it significant synergies, which will bolster Rogers’s financials over the longer period. Specifically, Rogers noted recently that those synergies are expected to work out to $200 million in fiscal 2023.
Speaking of results, in the most recent quarter, Rogers reported 170,000 net new activations in its wireless segment, reflecting an impressive 39% over the prior period.
Despite those gains, the stock is down over 10% year to date.
So, then, what makes Rogers one of the cheap stocks to buy right now? Apart from the defensive business that telecoms provide, Rogers also offers a respectable and well-covered dividend.
As of the time of writing, the quarterly dividend boasts a yield of 3.73%. And unlike its peers, Rogers isn’t committed to providing annual (and sometimes unaffordable) upticks to that dividend. Instead, the company has opted to invest in growth initiatives and pay down debt.
In short, Rogers is a great option to pick up at a discounted rate that can offer a stable income and long-term growth. And you don’t need a fortune to start investing. A $2,500 investment in Rogers will now get you 46 shares.
For long-term investors, that’s enough to let those reinvested dividends add a few shares to the total each year.
Don’t bet against the banks
Canada’s big banks are almost always regarded as some of the best long-term investments on the market. And that big bank to consider, which also happens to be one of the cheap stocks to buy right now is Canadian Imperial Bank of Commerce (TSX:CM)
Like its big bank peers, CIBC’s stock price has remained flat, if not dropped somewhat in 2023. And over the trailing 12-month period, CIBC is trading down a whopping 20%, which puts it into discount territory.
Part of the reason for that drop is the rising prices and surging interest rates we’ve seen recently. In short, rising interest rates make mortgages more expensive, and CIBC has a larger domestic mortgage book compared to its peers. That risk, coupled with a smaller international footprint to diversify itself has helped push the bank lower.
But despite that drop, CIBC still represents an excellent long-term option for investors. Prospective investors should recall that Canada’s banks have historically fared better than their U.S.-based peers during market downturns.
Currently, investors can buy CIBC at a hefty discount and enjoy its 6.47% dividend. As of the time of writing, a $2,500 investment in Rogers translates into just over 46 shares of CIBC.
Thanks to that generous dividend, that initial investment will generate just over $160 in the first year. That’s enough for several reinvested shares each year to help grow that investment over time. Prospective investors should also note that CIBC provides with a generous annual bump to that dividend.
Cheap stocks to buy right now can be found. But should you buy?
No stock, even the most defensive, is not without some risk. Fortunately, both Rogers and CIBC can offer investors significant defensive appeal, backed by long-term mature business models. They also offer respectable dividends that can provide a stable income stream.
In my opinion, one or both stocks should be core holdings in any long-term, well-diversified portfolio.
