Got $1,000? 2 Stocks That Are Too Cheap to Pass Up Today

It may make sense to pick up Nutrien (TSX:NTR) and another stock with an extra $1,000.

| More on:
edit Sale sign, value, discount

Image source: Getty Images

Even a relatively small amount, like $1,000, is enough to get started investing. Though it may not seem like all too much when it comes to financing your future retirement, it’s important to note that every bit does count. And though the power of compounding over the course of many years (or decades), even a seemingly small amount can translate to a lot if you invest in the right companies.

Indeed, it’s tempting to take a chance on speculative penny stocks or any sort of overvalued momentum play if you’re a new investor looking to put your first $1,000 (or less) to work. Though such speculation could grow your invested principal quickly, you may also run into quick losses and lose confidence in your ability to beat the markets over time.

There’s nothing wrong with index investing. In fact, it’s a great way for beginners to obtain broader exposure to what the market has to offer. Indeed, if you have a smaller amount of cash to invest, index investing and exchange-traded funds (ETFs) are excellent places to look. For those who want to follow in the footsteps of their investment idols (think Warren Buffett and the late Charlie Munger) and have the time to put in the homework, it’s more than worthwhile to pick your own stocks.

In this piece, we’ll look at two stocks that I view as cheap and ripe to pick for a new investor eager to get started investing!

CIBC

Value investing isn’t easy. Oftentimes, it entails picking up merchandise that nobody else on Bay Street cares to! CIBC (TSX:CM) and the rest of the Canadian banks have been hurting for quite a while now. As the economy tests a potential recession next year, the banks are sure to be a turbulent ride.

The stock trades at 10.91 times trailing price to earnings right now to go with a dividend yield of 6.64%. That’s a low price to pay for such a bountiful dividend yield! Though CIBC stock is riding higher in recent weeks, there’s still a long way to go if shares are to see new highs again. I’d say it’ll take at least two years before CIBC can stage a full recovery. If the economy isn’t rocked in 2024, perhaps CIBC stock could be a dividend bargain right here. Either way, I’m a fan of the name for beginner investors seeking value in the market’s discount rack!

Nutrien

Nutrien (TSX:NTR) is another unloved stock that’s sure not to make you excited. But the point of value investing is not to chase euphoria; it’s to grab shares of firms at a lower price than what they’re worth. And for a beginner, the more boring a firm, the better, in my opinion.

Mutrien stock is an agricultural commodity producer that’s down nearly 47% from its 2022 highs. As a stock that’s been known to suffer long-lived rallies and plunges, Nutrien seems quite untimely at this juncture. Further, commodities like potash are tough to forecast.

Supply and demand dynamics are influenced by numerous things, after all. In any case, you’re getting a robust producer with a nice 3.91% dividend yield. Though 2024 could see NTR stock continue to drag, I think averaging down (buying gradually on dips) is the way to go if you’re keen on going against the grain (pardon the pun) with the agricultural commodity kingpin.

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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends Nutrien. The Motley Fool has a disclosure policy.

More on Investing

The sun sets behind a high voltage telecom tower.
Dividend Stocks

Should You Buy Northland Power for its 5% Dividend Yield?

Northland Power stock trades 52% below all-time highs and offers shareholders a tasty dividend yield of 5% right now.

Read more »

TFSA and coins
Dividend Stocks

2 Top Stocks to Add to Your TFSA in February 2024

These two TSX stocks can be excellent holdings for your self-directed TFSA portfolio to inject stability and tax-free wealth growth.

Read more »

edit Back view of hugging couple standing with real estate agent in front of house for sale
Stocks for Beginners

Investors: What to Expect From Canada’s Real Estate Market in 2024

What does 2024 hold for Canada’s real estate market? Let's find out from Nathan Levinson of Royal York Property Management.

Read more »

dividends grow over time
Dividend Stocks

Passive-Income Seekers: Invest $10,000 for $400 or More in Annual Income

Are you interested in generating passive income? Invest $10,000 for a hefty annual income!

Read more »

edit Sale sign, value, discount
Tech Stocks

Got $1,000? 2 Stocks to Buy Now While They’re on Sale

These two top Canadian growth stocks look underpriced right now to buy for the long term.

Read more »

Two seniors float in a pool.
Tech Stocks

Could Nuvei Stock Help You Become a Millionaire?

Nuvei stock is favourably priced today for growth focused investors to buy. Could the stock enhance your chances to build…

Read more »

Canadian Dollars
Dividend Stocks

Want Decades of Passive Income? 3 Stocks to Buy Now

Want passive income that could last a lifetime? These three top Canadian dividend stocks have a good chance of delivering…

Read more »

Two seniors float in a pool.
Dividend Stocks

Retiring on Dividends: How Much Do You Need to Quit Work?

Canadians might need more than $1 million to quit work, but can still live comfortably in retirement with sustained dividend…

Read more »