Despite the market still running at near highs, there are still some superb undervalued stocks to buy right now. Not only do these come in at a discounted price, but they also come with superb growth and income potential.
Here’s a look at some of those great undervalued stocks to consider adding to your portfolio.
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All aboard the train to growth
Investors who couldn’t buy Canadian National Railway (TSX:CNR) the last time it traded near its 52-week low can take solace. As of the time of writing, the railway stock now trades closer to that low of just over $143.
Despite that temporary slump (and yes, it is temporary), Canadian National is full of long-term potential. As one of the largest railroads in North America, Canadian National hauls goods from warehouses, manufacturing facilities and ports across the continent.
Those goods often comprise anything from raw materials, automotive parts, and crude oil to wheat, precious metals and finished products. Collectively, the railroad hauls over $250 billion worth of goods each year. Beyond that, each freight train is also diversified across those verticals, making this a very defensive operation.
The railroad is also unique in that its massive network reaches three coastlines, adding to that overall appeal. It’s also not a coincidence that railways like Canadian National are often called arterial veins of the North American economy.
In short, Canadian National is not only one of the undervalued stocks to buy but one of the most defensive picks on the market.
Throw in a tasty 3.38% quarterly dividend with nearly three decades of annual increases, and you have a solid, undervalued stock to buy.
This bank is on the mend
Another one of the undervalued stocks for investors to consider buying right now is Toronto-Dominion Bank (TSX:TD). TD is the second largest of Canada’s big banks and is full of opportunity right now.
As of the time of writing, TD trades relatively flat over the trailing 12-month period. The bank only pulled into the black for that period in the past week. Part of the reason for that subpar performance can be traced back to TD’s troubles in the U.S. market.
TD enjoys a strong presence in the U.S. market, which is the bank’s primary growth market. In the U.S., TD’s branch network stretches from Maine to Florida. This makes it one of the largest banks in the U.S.
That being said, the bank has come under pressure in recent years. Specifically, TD was found to not have adequate anti-money laundering systems in place. As a result, U.S. regulators placed an asset cap on TD and slapped it with hefty fines last year.
That’s part of the reason why the stock remains flat right now, and it largely ignores the long-term potential of the bank.
Speaking of potential, while waiting for TD’s stock price to recover, prospective investors can take solace in the juicy dividend that TD offers. As of the time of writing, the quarterly dividend boasts a yield of 5.12%. That makes it one of the better-paying dividends on the market.
This means that a $20,000 investment in TD will generate an income of just shy of $1,000. Even better, investors who aren’t ready to draw on that income yet can choose to reinvest it. This will allow your nest egg (and future income) to continue growing on autopilot.
That fact alone makes TD a stellar, undervalued stock to buy right now.
The top two undervalued stocks for your portfolio are waiting
No stock, even defensive stocks like TD and Canadian National, is without some risk. Fortunately, both stocks boast considerable long-term potential and juicy yields in addition to that enviable defensive moat.
In my opinion, one or both of these undervalued stocks would do well as part of any well-diversified portfolio.
Buy them, hold them, and watch them grow.
