Stocks are looking cheap this month. With Trump Tariffs roiling markets worldwide, many stocks have been beaten down. U.S. stocks have been hit hardest, but the TSX, too, is down, having fallen 1.9% for the year (as of this writing a few days prior to publication).
So, stocks are cheaper than they were at the start of the year. That’s a good thing because the lower the price, the better the expected return.
If you have $5,000 kicking around in a brokerage account, now might be a good time to put some of it to work for you. In this article, I’ll explore how I’d invest $5,000 in Canadian stocks today.
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Suncor Energy
Suncor Energy (TSX:SU) is a Canadian oil stock that I started buying near the end of last year and continued buying this year. The company extracts and sells crude oil, operates refineries, and runs a major gas station chain called Petro-Canada. The company has been performing well in recent years. Its stock took a beating when Trump’s tariff assault caused a rapid and sharp decline in oil prices. However, energy prices are starting to climb again, and Suncor stock is quite cheap today, trading at 8.8 times earnings and 1.3 times book value. Overall, I’m happy to be holding Suncor and may add to my position this year.
Air Canada
Air Canada (TSX:AC) is one you’re probably familiar with. As Canada’s largest airline, it’s the only one in the country with a large number of international routes. This gives it a strong competitive position in sending Canadians abroad by air.
Air Canada stock is unbelievably cheap, based on the price-to-earnings ratio, which is 2.22. It might sound like this is a slam dunk buy, and I think it’s a decent buy, but there are some nuances we have to deal with here. First, Air Canada is doing a massive amount of capital expenditure this year and next, which will lead to a decline in free cash flow to near-zero. Second, the company is likely seeing a considerable decline in Canada-U.S. travel, as Canadians are avoiding the U.S., both to protest Trump Tariffs and to avoid being jailed by the immigration police at ICE. These risk factors are very real, but I think AC stock’s cheapness outweighs them.
Brookfield
Brookfield Corp (TSX:BN) is a Canadian stock I’ve held for a few years. I bought some shares on the dip this year. If I were just starting off today with $5,000 to invest, I’d gladly put a chunk of it into BN shares. The stock trades at a discount to its sum-of-the-parts valuation. The company is growing, with operating income up 25% in the trailing 12-month (TTM) period. Finally, Brookfield is run by Bruce Flatt, who is very charismatic and good at raising money. All of these positive qualities combine to make Brookfield stock a compelling buy today.
Foolish takeaway
The bottom line is if you’re just starting off today with $5,000 to invest, you should put it in quality blue-chip stocks. Gambling on risky ventures often ends badly. The three companies mentioned in this article are entrenched and not going anywhere. They would make worthy additions to many Canadian portfolios.
