Better Buy in February 2024: TD Bank Stock vs. Nuvei Stock

TD Bank (TSX:TD) and Nuvei (TSX:NVEI) are among the cheapest stocks to check out right now.

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In this piece, we’ll have a closer look at two intriguing stocks that look quite undervalued going into March 2024. TD Bank (TSX:TD) and Nuvei (TSX:NVEI) have both been under quite a bit of selling pressure in recent years. Though the source of their pains is very different, I still find there to be value in the following names if you’ve got the patience and time horizon.

Depending on your unique needs, you may already have a favourite stock in mind. Undoubtedly, TD Bank stock would be the better buy if you seek safe passive income, dividend growth, a slightly lower beta (that means less correlation to the TSX Index), exposure to Canadian and U.S. retail banking, and deep value. And if you’re a braver investor seeking growth and upside potential, Nuvei stock looks like the more attractive buy as it looks to climb out of its rut.

Personally, I think the shares of both companies are a tad on the cheap side. So, if you’re looking for a low-cost way to play the market’s recent hot run, consider the following:

TD Bank stock

TD Bank stock recently slipped just below the $80 per share mark earlier this week, thanks in part to the volatility hitting the TSX Index. Indeed, rate hikes may still be a tad farther off than some were expecting. In any case, income investors shouldn’t shy away from buying the dip in one of the best-managed financials on the planet.

Not only are Canadian banks incredibly well-managed and built to make it through tough times, but TD Bank stands out as one of the better risk managers in the bank world. As such, I find it absurd that the stock yields around 5.2%.

TD stock is a dividend growth gem that I believe will find a way to surge higher again, even if rates aren’t destined to sink into year’s end. At 14 times trailing price-to-earnings, TD stock looks like one to bank on for the portfolio, even if it means having to ride out a few rocky quarterly earnings results. Remember, low expectations could make future quarters much easier to surpass!

Nuvei stock

Nuvei is a Canadian payments firm that stands out as one of the most interesting mid-cap tech plays out there. With a $4.9 billion market cap and a recent partnership with Cash App Pay, it’s about time that investors gave the stock a second look as the founder-led firm looks to turn a bit of a corner.

Undoubtedly, as a tech firm, Nuvei could enjoy lower rates, which seem to be in the cards over the next three years. It’s not just about rates, though. Nuvei is making deals and is teaming up at a rapid pace, boding well for the firm’s growth prospects.

Over the past six months, shares have heated up, rising more than 55% over the timespan. I think there’s a good chance newfound momentum carries into the spring and summer months. Either way, I’m a fan of the depressed price tag and the founder’s confidence in his firm’s future.

Better buy: TD or NVEI stock?

I like TD stock better here, as its valuation continues to sink in the face of macro headwinds. The dividend is just one of the reasons why.

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 positions in Toronto-Dominion Bank. The Motley Fool has positions in and recommends Nuvei. The Motley Fool has a disclosure policy.

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