4 Best Stocks Under $50: Could They Double?

These four under $50 Canadian stocks could double from the current levels.

| More on:

The Canadian stock market remains strong irrespective of heightened volatility and fear of a spike in inflation. Further, the ongoing vaccine distribution, recovery in economic activities, normalization of operations, and corporate earnings growth provide a solid underpinning for outsized growth in several TSX stocks. 

Let’s delve deeper into four such Canadian stocks that could double from the current levels. Further, these stocks are trading cheap (under $50). 

Air Canada

Air Canada (TSX:AC) stock is on a recovery path and witnessed strong buying in the recent past on expectations of a revival in air travel demand amid ongoing vaccination. Air Canada stock has appreciated more than 65% in one year, and yet it is trading at a discount of about 48% compared to pre-COVID levels, making it an attractive buy at current levels.

While Air Canada might continue to operate at a limited operating capacity for few more months, I believe the stock has solid long-term growth prospects. The accelerated pace of vaccination is likely to drive air travel demand, in turn, boost Air Canada’s revenues, operating capacity, and margins. I expect to see a decline in its net cash burn rate, while its losses will likely go down sequentially. Besides the improvement in demand, Air Canada is also expected to benefit from its growing air cargo business, which is likely to support its top and bottom lines.

Suncor Energy 

Like Air Canada, shares of Suncor Energy (TSX:SU)(NYSE:SU) have also witnessed significant recovery, jumping over 50% in the last six months and reflecting a pickup in demand and higher average oil prices. I believe the Suncor stock has further upside potential from the current levels, thanks to the economic expansion, improvement in energy outlook, and increased crude oil prices. 

Further, Suncor is likely to deliver stellar revenues and margins, backed by higher production volumes, integrated assets, and lower costs. Moreover, its focus on debt reduction bodes well for future growth. Also, the company is paying regular dividends and could continue to enhance shareholders’ returns through share buybacks. 

AltaGas

AltaGas (TSX:ALA) stock has gained about 35% in six months, and the momentum could continue, reflecting continued strength in its base business, growing economic activities, and an uptick in demand. Its regulated utility business delivers robust cash flows and adds stability. Meanwhile, its midstream operations are growing rapidly and support overall growth. 

I believe rate base, new customer additions, higher exports, and cost efficiencies are likely to drive AltaGas’s earnings and dividends. The utility giant projects its 2021 EBITDA and EPS to increase by 12% and 20%, respectively, which is encouraging and should support the uptrend in its stock. 

WELL Health Technologies

WELL Health (TSX:WELL) has delivered exceptional returns in 2020 on the back of its stellar financial performances. However, its stock has lost nearly 20% of its value in the past three months, making it an attractive investment at current levels. Its revenues are growing at a breakneck pace, while it has reported positive adjusted EBITDA in two consecutive quarters.

I believe the company’s growing scale, market share growth, digitization of clinical assets, and strong acquisitions pipeline position it well to deliver solid sales and EBITDA in the coming years, which could continue to drive its stock higher. Meanwhile, its strong revenues and optimization of costs are likely to boost its cash flows.  

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 snahata has no position in any of the stocks mentioned. The Motley Fool recommends ALTAGAS LTD.

More on Dividend Stocks

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »

young people stare at smartphones
Dividend Stocks

GST/HST “Vacation”: Everything Canadians Need to Know

The GST/HST "vacation" is a little treat for the holidays, along with a $250 payment. What should you do with…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »