The pullback in TSX stocks due to macro uncertainty presents a solid opportunity to add some fundamentally strong stocks to build wealth. This means that even with a small amount, as little as $50, investors can build a portfolio of high-quality stocks offering solid long-term growth.
With this background, let’s explore three TSX stocks that are currently trading under $50 but have the potential to generate solid growth.
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CES Energy Solutions stock
CES Energy Solutions (TSX:CEU) is a compelling long-term stock under $50. It provides advanced chemical solutions for the energy sector. Despite volatile oil prices, CES has been generating accelerating revenue growth and solid margins in recent quarters. Increased drilling activity, strategic pricing, deployment of new technologies, strategic inventory purchases, and improved cost efficiencies drive its strong financial performance.
Further, its capital-efficient and asset-light business model enables it to generate significant free cash flow despite commodity price fluctuations. This higher cash flow enables it to focus on rewarding shareholders’ value via share buybacks and dividends.
CES has a strong foothold in major U.S. oil basins, and its focus on production chemicals makes it a key player in the energy value chain. The company will continue to gain from its U.S.-focused revenue mix, vertically integrated operations, and flexible supply chain. Also, the growing well complexity and drilling longer lateral lengths will likely increase the demand for CES’s high-performance fluid chemical solutions, thus driving future growth.
WELL Health stock
WELL Health Technologies (TSX:WELL) is another attractive stock trading under $50. Shares of this digital healthcare company have declined by over 40% this year. While the shares of this digital healthcare company have significant value, the company’s underlying fundamentals remain solid. It is witnessing higher demand for its omnichannel patient care services. Moreover, the company remains focused on scaling its Canadian operations, particularly its patient and technology service segments, which augur well for growth.
Its strategic acquisitions have broadened its footprint, expanded its technological capabilities, and opened up new markets internationally.
The momentum in WELL Health’s business will likely be sustained, driven by steady demand and accretive acquisitions. Moreover, its focus on optimizing its operations will cushion its bottom line. Moreover, its strong balance sheet, focus on debt reduction, and efforts to minimize share dilution are positives. Moreover, WELL stock is trading cheaply, providing a buying opportunity.
ADENTRA stock
ADENTRA (TSX:ADEN) is another attractive under $50 stock to buy for the long term. The company is under pressure due to unfavourable weather conditions and elevated U.S. mortgage rates. However, its long-term fundamentals remain solid. The company is poised to benefit from its diversified portfolio, strong balance sheet, national presence, resilient supply chain, and operational efficiency. Further, it is well-positioned to weather economic uncertainties and other major trade disruptions.
ADENTRA is growing, supported by strategic acquisitions and product expansion. Its focus on operational efficiency, vendor management, global sourcing, and high-value, installation-ready products drives its revenue and EBITDA. Notably, its adjusted EBITDA has increased at a 20% compounded annual growth rate (CAGR) in the past 10 years. The company has been focusing on returning value to its shareholders. It has increased its dividend in the past 12 years, resulting in a total shareholder return at a CAGR of 18.9%.
Furthermore, a persistent undersupply in the housing market, strong demographic trends, and an aging housing stock will drive continued demand for renovations and new construction, supporting ADENTRA’s growth.
