The TSX has several fundamentally strong stocks trading under $30, allowing investors to start investing in shares even with a small capital. While these stocks are trading cheaply, they have the potential to generate significant returns.
But before I discuss these stocks, it’s important to emphasize that investors should not select stocks solely based on their lower dollar value.
With this backdrop, let’s look at three no-brainer Canadian stocks to buy under $30 right now.
Well Health
WELL Health Technologies (TSX: WELL) is a compelling investment under $30 for long-term investors. Despite the reopening of the economy and macro challenges, this digital healthcare company has been performing well, which shows the resilience of its business model.
The company has consistently delivered record revenues for the past 20 quarters, driven mainly by a surge in omnichannel patient visits. Further, the company is pursuing profitable growth strategies, driving its margins and cash flows.
In the future, WELL Health will continue to benefit from the ongoing growth in its omnichannel patient visits. In addition, the company will likely gain from its accretive acquisitions. Also, its investments in artificial intelligence technology will enable it to expand its product base, supporting long-term growth.
While WELL Health is growing rapidly, its shares are trading at the next 12-month enterprise value (EV)/sales multiple of 1.5, which is near the all-time low and much lower than its historical average. This provides an excellent buying opportunity near the current market price.
Lightspeed
Lightspeed (TSX: LSPD) is another attractive stock that is too cheap to ignore. Shares of this technology company are trading at a massive discount from their highs, and its valuation (EV/sales ratio) is near an all-time low. While Lightspeed stock is available at a solid bargain, its financial performance remains strong, supporting my optimistic outlook.
The company is delivering solid organic sales thanks to the growing adoption of its digital products. Further, the company is poised to benefit from the shift in selling models towards omnichannel platforms. Notably, Lightspeed will likely see an acceleration in demand for its offerings as more merchants upgrade their traditional payment systems and invest in technology.
Additionally, Lightspeed is expanding its customer base with high gross transaction value (GTV). These high GTV customers are more likely to adopt its multiple modules, thus improving average revenue per user (ARPU) and reducing churn. Further, the company’s accretive acquisitions will help expand its customer base and product portfolio, positioning it well to deliver strong growth in the coming years.
Telus
Telus (TSX: T) is another attractive stock under $30. The telecom company has consistently delivered solid financial and operating performance, enabling it to fund its growth initiatives and enhance its shareholders’ returns through share buybacks and higher dividend payments. Telus has returned approximately $25 billion to shareholders, including $20 billion in dividends, since 2004. Further, Telus plans to grow its annual dividend by 7-10% under its multi-year dividend-growth program.
Telus’s growing customer base and focus on streamlining its operating costs have helped the company consistently generate solid earnings, grow cash flows, and pay higher dividends. Further, its industry-leading wireless and PureFibre broadband networks have enabled it to drive its customer base and reduce churn.
Looking ahead, the expansion of 5G services and national broadband network capabilities will continue to drive its customer base. Moreover, its focus on improving efficiency will cushion its earnings and share price.
