Where to Invest $10,000 in June 2023

Canadian investors who have excess cash to invest in June should look to promising undervalued stocks like Pet Valu Holdings Ltd. (TSX:PET).

Ambrose O'Callaghan

Ambrose O'Callaghan graduated with a BA in Political Science from McMaster University. After that, he jumped into the banking world. He worked from the front line to an investment associate role. After that, he found a way to marry his experience and knowledge in the world of banking and finance to his love and passion for writing. Ambrose is a passionate believer in Warren Buffett's value investing model.

Published June 11, 2023 9:00 am EDT

The S&P/TSX Composite Index shot up 352 points on Friday, June 2. Some of the top-performing sectors included battery metals, base metals, energy, industrials, and financials. Canadian stocks broadly performed poorly in the month of May. Fortunately, there are some great buy-low opportunities on the TSX right now.

Today, I want to discuss where we can invest $10,000 to kick off the month of June 2023. In this piece, I want to spread our $10,000 investment to cover equities that can provide a desirable balance of stability, income, and growth. We will be spending roughly $2,500 on each stock in this hypothetical. Let’s dive in.

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Enbridge: The undervalued high-yield dividend beast

Enbridge (TSX:ENB) is the first Canadian stock I’d look to snatch up with $2,500 in June. This is the top energy infrastructure company in North America. Its shares have dropped 5.9% month over month as of close on June 2. That has pushed the stock into negative territory in the year-to-date period.

This company released its first-quarter (Q1) fiscal 2023 earnings on May 5. It posted distributable cash flow of $3.2 billion compared to $3.1 billion in Q1 of fiscal 2022. Meanwhile, it posted adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $4.5 billion — up from $4.1 billion in Q1 2022.

The energy stock is trading in favourable value territory compared to its industry peers. It offers a quarterly dividend of $0.887 per share. That represents a very tasty 7% yield. Enbridge has delivered dividend growth for 27 consecutive years.

Pet Valu: A cheap and exciting growth stock

Canadian investors on the hunt for growth this June should look to Pet Valu (TSX:PET). This Markham-based company is engaged in the retail and wholesale of pet foods, treats, toys, apparel, and accessories in Canada. The pet care market is geared up for huge growth for years to come. Shares of this TSX stock have plunged 19% so far in 2023.

In Q1 2023, Pet Valu posted system-wide sales growth of 18% to $339 million. Meanwhile, revenue climbed 17% year over year to $250 million. It opened seven new stores in Q1 fiscal 2023. Pet Valu stock last had a price-to-earnings (P/E) ratio of 23, putting it in favourable value territory compared to its industry peers. It also offers a quarterly dividend of $0.10 per share, which represents a modest 1.2% yield.

Canadian Utilities: The Dividend King

A Dividend King is a stock that has achieved at least 50 consecutive years of dividend growth. These equities have proven to be extremely stable with elite cash flow in a highly dependable industry. As it stands today, there is only one Dividend King on the TSX: Canadian Utilities (TSX:CU). This Calgary-based company is engaged in the electricity, natural gas, and retail energy businesses in the United States, Australia, and around the world. Shares of this TSX stock have dropped 7% month over month.

The company released its Q1 fiscal 2023 results on April 27. Adjusted net earnings dipped marginally to $217 million. Meanwhile, earnings per share (EPS) remained flat at $0.81. Canadian Utilities possesses an attractive P/E ratio of 15. It offers a quarterly dividend of $0.449 per share, representing a very solid 4.9% yield.

Northwest Healthcare REIT: The cheap REIT with massive monthly income

Northwest Healthcare REIT (TSX:NWH.UN) is the fourth and final TSX stock I’d look to spend $2,500 on in the beginning of June. This Toronto-based real estate investment trust (REIT) owns and operates a global portfolio of high-quality healthcare real estate. The stock has suffered a further retreat over the past month.

In Q1 fiscal 2023, this REIT delivered revenue growth of 29% to $135 million. Meanwhile, total assets under management (AUM) increased 13% year over year to $10.8 billion. The Relative Strength Index (RSI) is a technical indicator that measures the price momentum of a given security. This REIT last had an RSI of 34, putting Northwest just outside technically oversold territory. It offers a monthly distribution of $0.067 per share. That represents a monster 10% yield.