As of this writing, the S&P/TSX Composite Index is up by 4.15% year to date, close to its newest all-time high. A bull run for the stock market is good news for investors watching the value of their holdings grow. However, investors with more money to allocate to the market do not particularly enjoy them.
When the market soars, finding undervalued stocks that are still trading at discounted valuations is challenging.
Fortunately, some TSX stocks are still lagging behind the rest of the market. Despite the Canadian benchmark index hovering close to its all-time highs, there are a few excellent opportunities to buy low and capture high-yielding dividends and capital gains. Today, I will discuss three such stocks you can consider adding to your self-directed portfolio.
Enbridge
Enbridge (TSX:ENB) is one of the most popular Canadian dividend stocks and a leading player in the energy industry. The $102.79 billion market capitalization multinational pipeline and energy company is headquartered in Calgary.
It boasts one of the world’s most complex and extensive energy pipeline networks. It transports a significant chunk of the hydrocarbons produced and consumed in North America.
It relies on long-term contracts indexed to inflation for most of its earnings before interest, tax, depreciation, and amortization (EBITDA), securing its cash flows from volatile commodity prices.
Due to its secure cash flows, it has increased its dividends by 10% annually for the last 29 years. As of this writing, it trades for $48.36, paying its investors their dividends at a juicy 7.57% dividend yield.
TC Energy
TC Energy (TSX:TRP) is another energy pipeline company headquartered in Calgary. The $56.31 billion market capitalization company owns and develops an energy infrastructure network across Canada, the U.S., and Mexico.
Recent years have seen TRP stock grab the attention of investors due to its impressive financial performance. Q4 fiscal year 2023 saw its revenue grow by 4.8% year over year, and its EBITDA grew by 15.8% in the same period.
The company has exceeded analyst expectations for earnings estimates for eight consecutive quarters, outperforming the broader market despite a challenging macro environment. As of this writing, it trades for $54.28 per share, paying its investors their shareholder dividends at a juicy 7.07% dividend yield.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is also from the energy sector, but it differs from ENB stock and TRP stock. The $103.63 billion market capitalization Calgary-based company is a producer. The company produces oil and natural gas, operating primarily in the Western Canadian provinces.
CNQ stock is another popular long-term holding for many Canadian stock market investors, owing to its ability to outperform the broader market and grow its shareholder dividends.
As of this writing, CNQ stock trades for $96.72 per share and boasts a 4.34% dividend yield. The stock has increased the payouts to its investors for the last 24 consecutive years at an impressive 21% compound annual growth rate (CAGR).
The underlying company’s high-value reserves combine with its low debt-to-adjusted funds flow ratio to make it a relatively secure long-term investment to consider for your self-directed portfolio than other energy producers.
- We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Canadian Natural Resources Ltd. made the list!
Foolish takeaway
It is too soon to say whether the current uptick will be a sustained bull run. While there might be more pullbacks in the market, analysts expect a significant surge in value stocks this year. Identifying and investing in such stocks can be an excellent way to generate significant wealth growth.
To this end, energy stocks like ENB stock, TRP stock, and CNQ stock can be excellent holdings to consider adding to your self-directed portfolio.
