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If you’re seeking promising investment ideas and a strategic approach to maximizing your returns in 2023, exploring the realm of Canadian value stocks could be an intelligent choice. This article looks at value stocks on the TSX with attractive valuations. Our diversified selection encompasses blue-chip equities that have the potential to deliver substantial total returns. Whether you are a seasoned investor or just starting, this guide will provide insights into the best Canadian value stocks, offering a solid foundation for your investment strategy.
Top 10 Best Canadian Value Stocks to Buy in 2023
Top 10 Best Canadian Value Stocks in 2023
Suncor is an Alberta-based integrated energy company that produces synthetic crude from oil sands. This large-cap giant is prone to extreme volatility but can be a value stock for a shareholder looking for an excellent dividend-paying stock. The company is said to have massively increased its payouts to shareholders. For instance, in the last year, Suncor increased its stock buybacks by more than 120% to $5.1 billion and dividends by 67% to $2.6 billion. Moreover, its latest earnings report suggests the company outperformed the stock market by a small margin, proving its strong fundamentals even in this recession-trapped market.
Molson Coors is a Chicago-based multinational drink and brewing company with more than $19 billion in market capitalization. Known for its portfolio of iconic beer brands, the company has achieved diversification by tapping diverse markets with diverse consumer preferences and by introducing new and exciting products to meet growing consumer demands. The market expects Coors’ shares to surge further due to controversy related to its competitor Anheuser-Busch, making it a value stock to consider. Moreover, as the stock is currently trading at a price-to-earnings ratio of about 15x relative to the market’s 25x, it appears to be undervalued. Therefore, it is an absolute bargain in the present times.
Canadian Apartment Properties REIT Stock
This Canada-based Real Estate Investment Trust is Canada’s largest publicly traded apartment landlord. Investors intending to earn through dividend yield can consider this as it is a dividend aristocrat known for its high dividend payout. Notably, CARPEIT has gained around 18% yearly and offers dividend growth. Currently, it yields 2.96%, which is much higher when compared to the broader market in general. Besides, this investment trust also benefits from its consistently solid occupancies and rising average monthly rents. So, even in a bear market, it can hedge one’s portfolio while simultaneously offering stellar passive income and capital gains.
Canadian Tire Corporation operates in the automotive, hardware, sports, leisure, and housewares sectors. The company has recovered from its 52-week low in recent months gaining over 17% year to date, although it is still an undervalued stock trading much lower than its all-time highs. The market still considers CTC a growth stock, especially for its presence in the automotive sector. That said, its latest financials showed the company’s earnings growth as unsatisfactory because consumers were moving away from non-essential purchases amidst high inflation. But when you consider that the retail conglomerate continues to invest in growing and expanding its business over the long haul, especially with the expansion of its Triangle Loyalty program, it can be one of the best stocks to invest in.
B2Gold is one of the most promising gold exploration companies. Although the stock has gained only around 4% in the past six months due to issues like the debt ceiling issue, it deserves to be on any investor’s radar as it is a solid performer with a balanced profile. B2Gold has high fiscal stability and low bankruptcy risk despite being a penny stock which is usually highly volatile. Besides, per its latest financials, the company has generated $204 million in cash from operations in the March-end quarter against $107 million in the year-ago quarter.
WELL Health Tech
WELL Health Technologies is a digital health tech company, the largest owner and operator of outpatient health clinics in Canada. The market considers it among tech stocks ready to blow out. Well, Health had a terrific time during the pandemic. However, the stock started falling following the rising inflation levels and the Fed’s series of interest rate hikes. Still, the company managed to deliver solid performance and, in 2022, reported record revenue of $569 million, 88% higher than the previous year. The earnings-per-share, though, was lesser than analyst expectations leading to a drop in its shares.
Goeasy is an alternative financial services company with a market capitalization of $1.8 billion. The stock can be a great addition to one’s portfolio as the company has been growing rapidly, with its sales and earnings increasing at a CAGR of 19.4% and 32.9% over the last five years. Notably, goeasy stock grew at a CAGR of over 25% in the previous five years, yielding more than 200%. It has also paid regular dividends for the last 19 years and increased the same through nine consecutive years. So, the ones who want to invest in a stock with high growth and regular income can buy Goeasy.
InterRent REIT, a growth-oriented real estate investment trust, aims to increase and maintain dividend payments while generating value for shareholders. It diversifies its holdings in markets with stable market vacancies, which continuously boosts its revenue and cash flows. Interestingly, this REIT reported the same property occupancy of 96.9%, an increase of 140 basis points from the previous year. The net operating income increased by 11.4% to $35.8 million. This REIT’s current dividend yield is 2.8%, and since 2017, it has boosted its dividend payouts by 7% annually.
Canadian Natural Resources
Canadian Natural Resources is a major independent oil and natural gas producer with operations throughout the West Canadian territory. Even though the stock has only increased by about 1.5% year to date as a result of the decline in the price of oil, it might be a great addition to the portfolio of dividend-loving investors because it is a high-quality dividend stock. This is implied by the fact that the company’s quarterly dividend payouts had climbed by 5.9% in March of this year and that the yield is roughly 4.79%. Furthermore, CNQ’s payout ratio is 35%, and its five-year dividend growth rate was 23.9%.
Tourmaline Oil is an Alberta-based natural gas producer. The company’s balance sheet has improved massively over the last few years as it has repaid billions of debt, thus improving its leverage from 1.5 times to 0.08 over three years. This debt reduction also made it more profitable. Although Tourmaline’s reported free cash flow had a significant decline from last year, the fact that debt repayments will not form a large chunk this time ensures dividends and buybacks will be the company’s priority. The considerable reduction in Natural Gas prices has caused the stock to fall over 10% in the last 12 months. It could be an exciting buy now.
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