Investing in quality, lower-priced stocks allows you to gain exposure to the equity market at a low cost. Historically, equities as an asset class have delivered inflation-beating returns to shareholders over time, making them attractive to long-term investors.
Here are three no-brainer stocks you can buy under $30 today.
Kinross Gold stock
Gold prices are hovering near all-time highs as central banks are raising their precious metal reserves due to geopolitical tensions and other macro headwinds. Moreover, the possibility of interest rate cuts should send gold prices higher as the two have an inverse relationship.
Keeping these factors in mind, investors can consider increasing their exposure to gold mining stocks such as Kinross Gold (TSX: K).
In the fourth quarter (Q4) of 2023, Kinross reported revenue of US$1.11 billion, up from US$1.07 billion in the year-ago period. The increase in sales was attributed to higher gold prices and an increase in the production of the yellow metal.
Kinross spent more than US$1 billion in capital expenditures in 2024, up from US$755 million in 2022. It ended the year with a free cash flow of US$116.7 million, while for 2023, this figure stood at US$559.7 million.
Kinross pays shareholders an annual dividend of US$0.12 per share, indicating a forward yield of 1.78%. Given its outstanding share count, its annual dividend payout would be less than US$150 million, which translates to a payout ratio of just 33%.
Analysts remain bullish on Kinross Gold stock and expect it to surge over 15% in the next 12 months.
Air Canada stock
One of the largest airline carriers in North America, Air Canada (TSX: AC) stock is down 60% from all-time highs. Air Canada and its peers have trailed the broader markets by a wide margin ever since the onset of COVID-19. In addition to the global pandemic, Air Canada has been impacted by headwinds such as inflation, rising fuel prices, and interest rate hikes.
To shore up its liquidity amid the COVID-19 pandemic, Air Canada increased its debt from $7 billion in 2019 to $13 billion in 2021. In the last two years, it has repaid around $2.5 billion of total debt. The company’s interest expense totalled $944 million in 2023, but it also generated $2.8 billion in free cash flow.
This means Air Canada stock is priced at three times trailing cash flows, making it one of the cheapest stocks on the TSX. Analysts are also bullish and expect shares to surge over 30% in the next 12 months.
Saputo stock
The final under-$30 TSX stock on my list is Saputo (TSX: SAP), one of the top 10 dairy processors in the world. Saputo produces, markets, and distributes a wide range of dairy products, including cheese, milk, and cream.
Down 45% from all-time highs, Saputo has underperformed by a wide margin in the past decade. However, despite a challenging macro backdrop, Saputo increased revenue by 7% year over year in fiscal Q3 of 2024 (which ended in December).
In 2024, the company expects to benefit from additional production capacity, cost containment, new product innovations, and marketing investments.
Saputo is on track to improve its adjusted earnings from $1.53 per share in fiscal 2024 to $1.91 per share in 2025. Priced at 14 times forward earnings, Saputo is quite cheap, given its earnings growth is set to accelerate through 2028.
