TSX Investors: These International Stocks Look Insanely Cheap

Diversification can help grow and protect your TSX stock investment portfolio. Here are two international stocks that are selling at insanely cheap prices today!

| More on:

It is very rare that TSX investors get opportunities to buy high-quality businesses at insanely cheap valuations. While market corrections can feel ugly, they are generally the best time to pick up stocks and improve the quality of your investment portfolio.

Put out the bucket

As the great investor Warren Buffett once said, “When it’s raining gold, reach for a bucket, not a thimble.” His point is to take advantage of fear in the market. If you have an extended time horizon, you can vastly improve returns by loading up on stocks when the market is selling them at a discount. This can be a great strategy for maximizing returns over the long term.

Reduce risk and increase returns by diversifying with a mix of TSX stocks

Another great strategy to maximize returns and minimize risk is to diversify your investment portfolio. This means having diverse exposure to stocks in different asset classes (like dividend-paying, growth, and blue-chip stocks), sectors (like finance, technology, industrials, etc.) and geography. Owning between 15 to 20 different stocks is a good target.

Often, you can find this diversification within individual stocks as well. Many top TSX stocks have operations that are global and diversified by geography and customer exposure.

These businesses can have a great natural hedge against economic volatility. If you are looking for some top TSX stocks with an international edge, here are two that look insanely cheap today.

Brookfield Asset Management: A naturally diversified TSX stock

If you want a TSX stock that is naturally diversified by sector and geography, you can’t find much better than Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM). It manages over $700 billion worth of alternative assets across the world. These assets include infrastructure, renewable power, real estate, private equity, insurance, and debt investments.

The company has a great long-term track record. It has compounded distributable earnings per share by a 21% annual rate over the past five years. Its distributable earnings per share in 2021 were double what they were in 2018.

However, its stock has lagged. It has delivered only a 69% stock return in that time. Today, this TSX stock trades for only 12 times adjusted funds from operation (AFFO). That is a five-year-low valuation. Given Brookfield is growing AFFO at nearly double that rate, it looks like an attractive bargain today.

TSX stocks that look very cheap

TELUS International: A steady growth tech stock

If you are looking for a combination of steady growth and value, look no further than TELUS International (TSX:TIXT)(NYSE:TIXT). It is one of the world’s leading providers of digital customer experience and IT services.

TELUS International has operations and call centres across the world. Basically, it helps some of the world’s largest companies improve their customer relationships through automation, data analysis/annotation, and high-quality customer interactions. This TSX tech stock is a great way to get exposure to trends like artificial intelligence, cloud data computing, and the internet of things.

Since its initial public offering (IPO) last year, this TSX stock has pulled back 16%. It is expected to grow revenues, EBITDA, and earnings by a mid- to high teens rate this year. Despite that, it only trades with enterprise value-to-EBITDA ratio of 12.

The market seems to discount its high-quality, contracted customer base and its longer-term growth potential. For investors able to look past the short-term market volatility, they can pick up a high-quality growth stock at an attractive discount now.

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 Robin Brown has positions in Brookfield Asset Management Inc. CL.A LV and TELUS International (Cda) Inc. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV and TELUS International (Cda) Inc.

More on Stocks for Beginners

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Emerging Canadian AI Companies With Big Potential

These tech stocks are paving the way to an AI-filled future, but still offer enough growth ahead for a strong…

Read more »

Young Boy with Jet Pack Dreams of Flying
Tech Stocks

Is Constellation Software Stock a Buy, Sell, or Hold for 2025?

CSU stock has long been a strong option for high growth, high value stocks. But are there now too many…

Read more »

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 »

Asset Management
Stocks for Beginners

TFSA: 4 Canadian Stocks to Buy and Hold Forever

Thinking about what to buy with the new TFSA contribution space in 2025? These four Canadian stocks are worth holding…

Read more »

concept of real estate evaluation
Stocks for Beginners

2 No-Brainer Real Estate Stocks to Buy Right Now for Less Than $1,000

These two real estate sector-focused stocks have the potential to deliver strong returns on your investments in the coming years.

Read more »

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

stocks climbing green bull market
Stocks for Beginners

3 TSX Stocks Soaring Higher With No Signs of Slowing

Don't ignore stocks just because they look like they're at a high price. Instead, see exactly why they've driven so…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »