3 Incredibly Cheap TSX Stocks I’d Buy in the Market Correction

0 0

Stock market corrections are ideal times to buy stocks in great businesses at very cheap prices. With the TSX Index down 7.5% in 2022, it is hitting correction territory. If it weren’t for Canada’s large exposure to oil and gas stocks, the broader TSX would likely be much lower this year.

If you have an iron stomach and a long investment horizon (five years or more), the market correction is a great opportunity to fill your portfolio with top-quality stocks. Here are three stocks I’d consider picking up on the dip.

A top TSX income stock

As with most real estate stocks, BSR REIT (TSX:HOM.U) has pulled back significantly. It is down 16% in 2022. This real estate investment trust (REIT) owns a portfolio of well-located, garden-style apartment properties in Texas and Oklahoma.

In its first quarter of 2022, BSR grew its adjusted funds from operation (AFFO) (a core measure of real estate profitability) by 81% over last year! The value of its properties increased 66% on a per-unit basis. Its properties are located in some of the fastest-growing markets in America. Consequently, it is seeing market-leading rent growth.

Despite that, it is one of the cheapest apartment REITs you will find. It has a great management team, high-quality assets, and pays an attractive 3.4% dividend yield. For value, income, and growth, this is a great TSX stock to buy and hold for the long-term.

A top Canadian blue-chip stock

Canadian railroad stocks have been great blue-chip stocks to buy and hold for years and decades. They have limited competition, great pricing power, and provide economically essential transportation services. Consequently, their businesses are very resilient over long periods of time.

This year, Canadian National Railway (TSX:CNR)(NYSE:CNI) is down 8%. This TSX stock is trading with an elevated dividend yield of 2% right now. Its historic average yield is closer to 1.6%. This indicates that there might be some value in the stock at current prices.

CN Rail stock is never “cheap.” However, it might be undervalued today. Any major dip in the past 10 year has been an attractive chance to add this stock to your portfolio. For a steady, long-term compounder, CN is a great stock to buy on the dip and tuck away for the long term.

A top TSX growth stock

Some of the best value in the market today might be within Canadian growth stocks. Both profitable and unprofitable businesses are being “thrown out with the bath water.” This valuation reset is creating long-term opportunities. One growth stock I really like is BRP (TSX:DOO)(NASDAQ:DOOO). This TSX stock is down almost 25% this year.

With a price-to-earnings ratio of only six, this stock is incredibly cheap. BRP stock is the cheapest its valuation has ever been (other than during the pandemic crash).

BRP is one of the largest sellers of recreational vehicles and boats in the world. Certainly, these are discretionary products that could be impacted if we hit a recession. Yet the company continues to see strong demand. It has a long history of innovation, good management, and strong annual double-digit returns.

If you are looking to be opportunistic and contrarian, this cheap growth stock could have significant upside if negative economic headwinds start to reverse.

The post 3 Incredibly Cheap TSX Stocks I’d Buy in the Market Correction appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Brp Inc.?

Before you consider Brp Inc., we think you’ll want to hear this.

Our nearly S&P/TSX market doubling* Stock Advisor Canada team just released their top 10 starter stocks for 2022 that we believe could supercharge any portfolio.

Want to see if Brp Inc. made our list? Get started with Stock Advisor Canada today to receive all 10 of our starter stocks, a fully stocked treasure trove of industry reports, two brand-new stock recommendations every month, and much more.

See the 10 Stocks
* Returns as of 4/14/22

setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);

More reading

Worried About a Correction? Buy These 3 Stocks
TFSA Investors: 3 Stocks You Should Hold in Your Portfolio
Retirement Investors: 2 Oversold TSX Dividend Stocks to Buy on the Pullback
New Investors: Buy These 3 Blue-Chip Stocks
The 3 Best Canadian Dividend Stocks to Buy in June 2022

Fool contributor Robin Brown has positions in BRP INC and BSR REAL ESTATE INVESTMENT TRUST. The Motley Fool recommends BSR REAL EST INVST and Canadian National Railway.

 14 total views,  2 views today

Leave A Reply

Your email address will not be published.