2 Canadian Stocks Too Cheap to Ignore Today

Consider investing in these cheap Canadian stocks for substantial capital gains when markets recover.

| More on:

The Canadian stock market has had a rough year so far in 2022, and the volatility does not seem like it will let up anytime soon. The S&P/TSX Composite Index is down by 15.29% from its 52-week high at writing. The Canadian benchmark index indicates a significant weakness in the Canadian equity market, as most Canadian stocks trade for significant discounts from their latest all-time highs.

Many Canadian stock market investors are busy offloading shares and looking for safe-haven assets to hedge against the volatility. However, savvier investors who recognize the downturn as an opportunity to find undervalued stocks are busy looking for high-quality equity securities trading at a bargain.

Are you an investor who falls into the latter category? Here are two TSX stocks that have become too cheap to ignore. Let’s take a closer look to help you determine whether they could find a place in your investment portfolio.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is a $90.86 billion market capitalization Canadian financial institution. Headquartered in Toronto, Scotiabank stock is one of the Big Six Canadian banks. It enjoys greater exposure to emerging markets in its international operations compared to its peers.

The bank boasts significant long-term growth potential due to its emerging market operations. It also has strong domestic operations that deliver safe and stable cash flows.

Bank of Nova Scotia trades for $75.44 per share at writing, and it boasts a juicy 5.46% dividend yield. Scotiabank stock is down by 20.58% from its 52-week high, reflecting a significant discount.

The lower valuation has also inflated its dividend yields to attractive levels. Between the inflated dividend yield and discounted share prices, Scotiabank stock could be an excellent asset for value-seeking investors to consider.

Wheaton Precious Metals

Wheaton Precious Metals (TSX:WPM)(NYSE:WPM) is a $20.42 billion market capitalization precious metals streaming company. Headquartered in Vancouver, the company does not have mining operations itself.

Rather, it has agreements with 23 operating mines to purchase gold and silver at low prices. The company pays those mines a predetermined amount to assist in developing the mines, making its business less capital intensive and more profitable.

Wheaton Precious Metals stock trades for $45.22 per share at writing, and it boasts a 1.70% dividend yield. Wheaton Precious Metals stock is down by almost 24% from its 52-week high, trading for a significant discount.

WPM stock has a 12-month average consensus price target of $70.60 per share, with a high forecast of $86 per share, presenting a significant upside potential. It could be an attractive investment to consider at current levels for investors bullish about its recovery.

Foolish takeaway

A word of warning: the stock market is still quite volatile, and the macroeconomic factors contributing to its uncertainty might persist for several weeks or months. The next few weeks could see the value of any investments you make right now decline further. Risk-averse investors concerned about short-term returns might want to be wary of investing right now.

Let’s suppose you have a long investment horizon and are not worried about what happens in a few weeks. In that case, looking for undervalued investments with the potential to deliver substantial long-term returns might be a good way to go in the current environment.

Scotiabank stock and Wheaton Precious Metals stock could be excellent assets to consider adding to your portfolio for this purpose.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA.

More on Dividend Stocks

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 »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Here’s the Average TFSA Balance at Age 44 in Canada

You can invest your TFSA in funds like the BMO Canadian High Yield Dividend ETF (TSX:ZDV) to grow the balance.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

The Best Telecom Stock to Buy Before 2025

Choosing the safest stock from a decimated sector can be tricky, but if there is a reasonable chance of full…

Read more »