3 TSX Stocks to Buy for Less Than $20 (That You’d Actually Want to Own)

Cheap TSX stocks such as Enerflex are trading at massive discounts to consensus price target estimates in September 2023.

| More on:

Quality, lower-priced stocks can help you gain access to the equity market with just a small amount of capital. While a cheap stock may be attractive, you still need to analyze its fundamentals and growth potential before making an investment.

Here, I have shortlisted three top TSX stocks you can buy for less than $20.

Kinross Gold stock

Priced at $6.84 per share, Kinross Gold (TSX:K) is valued at a market cap of $8.4 billion. It is involved in the production, acquisition, exploration, and development of gold properties in the U.S., Russia, Chile, Brazil, Ghana, and Mauritania.

Mining companies such as Kinross Gold can be a proxy for investing in gold, which further diversifies your portfolio. Generally, the share prices of gold miners are tied to gold prices. Moreover, as gold prices and interest rates have an inverse relationship, Kinross Gold stock trades 48% below all-time highs due to a steep increase in bond yields over the past 18 months.

In the second quarter (Q2) of 2023, Kinross increased its production by more than 22% year over year, allowing it to deliver $247 in free cash flow, up from $108 million in the year-ago period. Due to higher production numbers, Kinross has also improved adjusted earnings by over 150% in the first six months of 2023 to $0.21 per share.

Priced at 12.5 times forward earnings, Kinross stock is quite cheap and also pays shareholders an annual dividend of $0.16 per share, translating to a yield of 2.4%. The TSX stock trades at a discount of 27% to consensus price target estimates.

RioCan REIT stock

Among the largest real estate investment trusts (REIT) in Canada, RioCan (TSX:REI.UN) stock is priced at $19.4. Valued at a market cap of $5.8 billion, RioCan owns, manages, and develops retail-focused properties in prime, high-density areas where Canadians want to shop, live, and work.

At the end of Q2, RioCan’s portfolio consisted of 193 properties with a net leasable area of 33.5 million square feet. Its widening portfolio of cash-generating properties allows RioCan to pay investors an annual dividend of $1.08 per share, indicating a yield of 5.6%.

It ended Q2 with FFO (funds from operations) of $0.44 per share. Given its monthly dividend of $0.09 per share, RioCan has a payout ratio of 62%, which is quite sustainable.

The REIT also trades at a discount of 20% to consensus price target estimates.

Enerflex stock

The final under $20 TSX stock on my list is Enerflex (TSX:EFX), an energy infrastructure company. In the first six months of 2023, Enerflex increased sales by more than 100% year over year to $776.7 million. Its adjusted earnings before interest, tax, depreciation, and amortization more than tripled to $265 million from $82.7 million in the year-ago period.

Priced at 8.4 times 2024 earnings, EFX stock is really cheap and trades at a discount of 50% to consensus price target estimates.

In 2023, Enerflex is focused on the integration of Exterran, a company it recently acquired. Enerflex is also looking to strengthen its financial position and reduce balance sheet debt to ensure financial stability across market cycles.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Enerflex. The Motley Fool has a disclosure policy.

More on Dividend Stocks

people relax on mountain ledge
Dividend Stocks

Top Canadian Stocks to Buy for Passive Income 

Are you building a passive income portfolio that can beat inflation and provide higher purchasing power? You could consider buying…

Read more »

voice-recognition-talking-to-a-smartphone
Dividend Stocks

1 Magnificent Canadian Dividend Stock Down 40 Percent to Buy and Hold Forever

This magnificent Canadian dividend stock trades at a huge discount, offers stellar growth, and pays one of the best yields…

Read more »

A plant grows from coins.
Dividend Stocks

Top Canadian Stocks to Buy for Dividend Growth

Dividend growth stocks can be a good option to build a passive income that beats inflation and improves buying power.

Read more »

Concept of multiple streams of income
Top TSX Stocks

The Best Stocks to Invest $1,000 in Right Now

Here are some of the best stocks that every investor should own today to generate massive income and strong growth…

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

Trump’s Tariffs Could Hurt Your TFSA – But These 2 Stocks Will Keep it Safe

Worried about tariffs coming down? Then consider these two stocks to keep your portfolio safe.

Read more »

concept of real estate evaluation
Dividend Stocks

3 Top Real Estate Sector Stocks for Canadian Investors in 2025 

The Canadian real estate sector could see modest growth in 2025, but its long-term secular demand remains intact.

Read more »

Dividend Stocks

Buy These 3 Canadian Stocks Before Tariffs Change the Game

These three dividend stocks offer security, growth -- you name it. No matter what tariffs come our way.

Read more »

data analyze research
Dividend Stocks

This 7.6% Dividend Stock Is a Must-Buy as Trump’s Tariffs Hit Canada

If there's one way to add some consistency to your portfolio, it's an investment in a passive-income powerhouse like this…

Read more »