3 Canadian Stocks Under $10 for a Money-Making 2019

With a dividend yield of almost 8%, Northwest Healthcare Properties REIT (TSX:NWH.UN) is one of three solid money-making Canadian stocks trading at bargain prices.

| More on:

Sometimes, looking at the smaller names in the market uncovers significant money-making opportunities.

Whether it is because of a lack of coverage or hype, a misunderstanding of future opportunities, or an assessment that they are too risky, these stocks are often mispriced.

Here are three stocks under $10 that have the potential for massive upside in 2019 — stocks that are in a defensive sector, have strong balance sheets, and/or are trading at cheap valuations.

Freehold Royalties (TSX:FRU)

With a highly diversified list of quality assets in a royalty model, Freehold is a less-risky way to bet on the oil and gas market. And with the recent strengthening of oil prices, the time when the stock finally moves higher may be here.

Trading at $8.50 at the time of writing, it has been hit hard in the last year, down almost 40%. Freehold stock currently has a dividend yield of 7.41%, which is safe and well covered.

You see, Freehold’s financials remain exceptionally strong, making this price action a great buying opportunity.

Operating cash flow increased 27% versus last year in the third quarter of 2018 and 9% versus last quarter.

And with a payout ratio of only 55%, investors have enjoyed dividend increases in recent times, as the company’s free cash flow generation has increased dramatically in accordance with the increase in oil prices.

Absolute Software (TSX:ABT)

With a $300 market capitalization and a 4.02% dividend yield, Absolute Software stock provides investors with a relatively small, profitable company that is returning cash to its shareholders as well as investing in growth.

I view it as a relatively low-risk way to gain access to the cybersecurity investment thesis.

In the last three out of four earnings reports, Absolute beat expectations, as profitability and margins are on the rise.

With a strong concentration of its business in the health care, financials, and professional services markets, high recurring revenue, and a no-debt balance sheet, Absolute is well positioned for future growth in its business and its stock price.

The stock has rallied approximately 15% in the last year in what may very well be just the beginning of solid returns ahead.

Northwest Healthcare Properties REIT (TSX:NWH.UN)

With a current dividend yield of 7.86%, Northwest represents a good opportunity. And although it trades at a hair over $10, it makes this list because of its strong future.

The company offers a high-quality, global, diversified portfolio of healthcare real estate properties located throughout Canada, Brazil, Germany, Australia, and New Zealand. As such, Northwest stock offers investors exposure to the biggest demographic shift that much of the developed world is facing.

Latest results showed strong net operating income growth of 4% on a constant-currency basis.

The one headwind the company is facing is that rising interest rates may be problematic for its highly levered balance sheet.

But healthcare properties generally have stable occupancies and long-term leases, which make the underlying REIT a defensive one that is attractive for long-term investors and dividend seekers.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Karen Thomas owns shares of NORTHWEST HEALTHCARE PPTYS REIT UNITS. Northwest Healthcare is a recommendation of Stock Advisor Canada. Freehold Royalties is a recommendation of Dividend Investor Canada.

More on Dividend Stocks

Canadian dollars are printed
Dividend Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Toronto-Dominion Bank (TSX:TD) stock could do well in the year ahead.

Read more »

monthly desk calendar
Dividend Stocks

Monthly Income: Top Dividend Stocks to Buy in November

Here are two of the best monthly dividend stocks in Canada you can buy in November 2024 and hold for…

Read more »

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Use Your TFSA to Earn Ultimate Passive Income

If you have a TFSA, then you have the key to creating ultimate passive income. All you need is a…

Read more »

Confused person shrugging
Dividend Stocks

Better Buy: Fortis Stock or Hydro One Stock?

Let's do a compare and contrast of these two top utilities stocks right now, shall we?

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Boost Your Passive Income: 2 Canadian High-Yielders at a Bargain

Nutrien (TSX:NTR) stock and another play that appear like fantastic dividend bargains in mid-November.

Read more »

3 colorful arrows racing straight up on a black background.
Dividend Stocks

TSX Stocks Soaring Higher With No Signs of Slowing

Three TSX stocks continue to beat the market and could soar higher in an improving investment landscape.

Read more »

Hourglass and stock price chart
Dividend Stocks

Goeasy Stock: Is It Heading for a 52-Week High?

Goeasy stock has been edging higher, especially after another record-setting earnings report. So are 52-week highs in sight?

Read more »