3 Dirt Cheap TSX Stocks You Can Buy Right Now
The Motley Fool
Published Jan 18, 2019 10:51
Updated Jan 18, 2019 11:06
Down markets provide buying opportunities for enterprising investors. While the TSX has been on the rebound lately, there are still plenty of bargains to be had. Whether you like financials, airlines or banks, there are plenty of stocks on the TSX trading at less than 10 times earnings. And there’s never been a better time to buy them than now.
In this article I’ll be sharing three of them, starting with one financial stock that most haven’t heard of–but has a long and storied history.
CI Financial Corp (TSX:CIX)
CI Financial is an investment management firm with deep roots in the financial sector. In the past, the company has been a partially-owned subsidiary of Scotiabank and Sun Life Financial. Today it’s a diversified firm involved in asset management, wealth management and ETFs. In its most recent quarter, the company’s assets under management (AUM) came in at $140 billion, which was 12% higher than the same quarter a year before. Net income grew at just 3%, but free cash flow grew at 6%, which many consider that a more accurate measure of profitability. CI also pays a dividend that’s currently yielding about 1.9%.
Air Canada (TX:AC)(TSX:ACB)
Air Canada gets a lot of grief from customers, but the company has rewarded its investors handsomely over the past five years. Since January 2014, it has more than doubled in price, rising about 200%. Airlines are unpopular with some investors because of their razor-thin profit margins that can result in losses during times of unforeseen expenses.
And indeed that’s been happening with Air Canada, as its earnings in Q3 came in at $645 million, down from $1.7 billion in the same quarter a year before. That’s a steep decline, but the company’s revenue is still growing. The big question is whether fuel costs can be brought under control enough to get those earnings growing again. But in the meantime, the stock has entered dirt cheap territory with a price just 7.5 times forward earnings.
Canadian Imperial Bank of Commerce (TSX:CM) (NYSE:CM)
Last but not least, we have CIBC. This stock is not a favourite among the Canadian Big Five banks, but that may be undeserved. Although the company’s revenue is growing at just 4% year over year, its U.S. commercial banking business grew at a whopping 178% in 2018. If the company can keep that growth up, it may become a major player in the U.S.–which could send bottom line growth higher.
Get The App
This is similar to what’s being seen with TD Bank, whose stock is a favourite owing to its growing U.S. retail business. CIBC’s U.S. operations are actually growing faster than TD’s, but are much less publicized. As a result, the stock trades at just nine times earnings–making it one of the cheapest financials on the TSX today.
Fool contributor Andrew Button has no position in any of the stocks mentioned.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.