3 Undervalued TSX Stocks to Buy Under $30 in 2021

Looking for great undervalued stocks to buy for the long run? Here are three great TSX stocks that are under $30, with lots of growth ahead!

| More on:

The S&P/TSX Composite Index has performed phenomenally well in 2021. Up over 9% year to date, the TSX strength has been supported largely by value stocks. Frankly, it was about time that Canadian stocks got some love!

With the top Canadian market bouncing off all-time highs, it can be hard to find good value. Certainly, there are portions of the market that seem pricey and speculative. All I have to mention is Bitcoin, and you probably get what I mean.

Yet Canada is home to some great, solid businesses. These are businesses that, in Warren Buffett’s words, are “productive.” By this I mean they produce products or services that contribute to society. Many of these businesses are leaders globally as well.

While a “cheap stock” is a relative phrase, here are three TSX stocks that appear undervalued given their long-term prospects for success. They all trade for under $30 per share and offer investors a nice mix of dividend and capital growth ahead.

A green TSX utility stock

The first TSX stock that looks undervalued is Algonquin Power (TSX:AQN)(NYSE:AQN). The stock trades for just over $20 per share. Yet only two months ago, it traded for 10% more.

Algonquin is a major utility and a renewable power provider in the United States. Some of its wind power assets were shut down during the extreme cold-weather event in Texas. As a result, the stock took a dive when management announced a 5-7% consequence on 2021 earnings.

Yet this is only a temporary hitch. For contrarian investors, it presents a great buying opportunity. Algonquin has some great assets and it is widely diversified. The company is progressing an aggressive capex plan that should ensure +10% annual earnings per share growth for the next five years.

Over the past 10 years, the company has consistently raised its dividend by a CAGR of 10%. If you like dividend growth, this a great stable income stock to own. Today, it pays a 3.8% dividend, but it won’t be long before that yield on cost is likely far, far higher.

A pandemic recovery stock

AltaGas (TSX:ALA) is another TSX stock that is cheap, especially compared to its peers. This company operates a large natural gas distribution business in the United States. As well, it has integrated midstream operation in Canada. AltaGas has had some stumbles in the past. Yet, it has greatly simplified its business. It has been reducing its exposure to riskier assets and lowering debt on its balance sheet.

This TSX stock will benefit especially as the world recovers from the pandemic. Commercial demand for natural gas should rise, especially as the U.S. quickly recovers. Likewise, demand for products like propane are ever growing, especially in Asia. AltaGas has assets that play well into these themes. Today, the stock trades for under $21 per share and pays a nice 4.7% dividend.

A TSX e-commerce stock

The last undervalued TSX stock is Intertape Polymer Group (TSX:ITP). If you are like me, more and more Amazon boxes are showing up at your doorstep every day. Chances are good the tape that seals those boxes is produced by Intertape. Over the past few years, this company has worked hard to create low-cost, good-quality e-commerce packaging offerings.

The investments paid off, and last year Intertape had one of its best years. The stock only trades with a forward price-to-earnings ratio of 15 times. Yet, given the quality of its products and market advantage, it could deserve even better. To top it off, it pays a solid 2.8% yield right now. This TSX stock is up, but it could still have years of e-commerce growth ahead!

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.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Robin Brown owns shares of Algonquin Power & Utilities. and Amazon. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends ALTAGAS LTD and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.

More on Dividend Stocks

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Invest Your $7,000 TFSA Contribution in 2024

Here's how I would prioritize a $7,000 TFSA contribution for growth and income.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »

how to save money
Dividend Stocks

Got $1,000? The 3 Best Canadian Stocks to Buy Right Now

If you're looking for some cash flow from your $1,000 investment, these are the ideal investments to make.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

A Dividend Giant I’d Buy Over BCE Stock Right Now

Don't get sucked in by BCE's 10% dividend -- the stock is a total yield trap. Buy this instead.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

Consider Sienna Senior Living for a Stable Monthly Income

Buying this Canadian dividend stock could help you build a dependable monthly income portfolio for the long term.

Read more »