Are you looking for deeply discounted dividend stocks to snap up on the TSX today?
Truth be told, they’re not the easiest things to find. The TSX has set several all-time highs this year and is currently pricey by historical standards, trading at 21.1 times earnings. The TSX is certainly not in an extreme bubble or anything like that, but it’s not a bargain. Cheap stocks are getting rarer by the day.
Still, there are some pockets of value if you know where to look for them.
In this article, I share three TSX stocks that look discounted at today’s price.
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Goeasy
Goeasy (TSX: GSY) is a direct-to-consumer lender. As a non-bank lender, it does not use deposits as a primary source of funding. Instead, it sells debt and equity in order to come up with the money to loan to Canadians.
Another difference between goeasy and a bank is the size of its loans. Typically, the company loans out small amounts of money, needed to buy furniture or electronics. It conducts these activities through its subsidiaries EasyHome and EasyFinancial. It does not issue large loans like mortgages.
Going by multiples, goeasy is a pretty cheap stock. At the time of this writing, it is trading at 9.7 times earnings, 3.3 times sales, and 2.1 times book value. This is not exactly deep value territory, but it’s cheaper than the TSX Composite Index as well as the TSX financials sub-index.
Suncor Energy
Suncor Energy Inc (TSX: SU) is a Canadian energy company that is involved in exploration, production, refining and gas stations. The company is one of Canada’s most important energy companies, supplying power to Canadians via gas stations and to corporate customers via crude oil exports. The energy firm has refinery operations in Colorado and markets natural gas across North America. Like many Canadian oil companies, Suncor struggled after oil prices crashed in 2015. However, a massive spike in oil prices in 2022 gave Suncor a window of opportunity to sell its oil at very high prices. It used the opportunity to pay down debt. The company is now much stronger than it was for most of the last 10 years. Despite this, SU stock is still cheap, trading at just 11.6 times earnings.
EQB Inc
EQB Inc (TSX: EQB) is a Canadian bank. It is the biggest branchless Canadian bank, with $35.7 billion in deposits and $54 billion in total assets. Although those numbers are tiny compared to the deposits and assets of the Big Six banks, they are nevertheless significant for a branchless bank.
What does EQB have going for it?
First, it has higher historical growth than Canada’s larger banks, having approximately doubled its earnings since 2016 and compounded its dividend by a 23.3% CAGR over the last five years.
Second, it has no branches and lower overhead costs than its competitors do.
Third and finally, the bank’s deposits are overwhelmingly GICs, a more reliable source of funding than demand deposits.
EQB looks poised for success, yet its stock is actually cheap, trading at a mere 9.3 times earnings. That’s cheaper than the big banks these days, so investors may want to take a look at EQB stock.
