The TSX today continues to see a bit of a turnaround. Consumer Price Index (CPI) data for October in the United States sent shares upwards this week, as the world over thought perhaps we may indeed have that soft landing talked about. Yet we’re not out of the woods yet. This means there are still Canadian stocks trading at quite a discount and that offer major value.
Today, let’s look at some Canadian stocks to consider while the market is still down but perhaps on the path to recovery.
Bank stocks
Bank stocks are still some of the best-value stocks on the TSX today. What’s more, these are some of the best stocks to consider as they recover. Yet banking stocks are still down in the last year, with some even trading down in the double digits.
Even so, we enjoy an oligopoly here in Canada — something you won’t find in the United States. With fewer options for Canadians, there is more cash coming in for these bank stocks. This has allowed for provisions for loan losses, allowing the banks to come out of these downturns as strong as they were before.
But if you’re worried and want some protection, perhaps the best value comes from Royal Bank of Canada (TSX:RY). Royal Bank stock is the largest bank in terms of market capitalization and is tied for first in terms of assets under management. It continues to see growth through both acquisitions along with wealth and commercial management.
What’s more, Royal Bank stock still provides a superb deal. It trades at 11.58 times earnings, offering a 4.53% dividend yield as well. So, with shares down 9% in the last year, this could be the time to buy.
Utility stocks
Another great option right now for security and growth is from utility stocks. These stocks surged at the beginning of this downturn, with investors seeking out companies that will see cash flow no matter what. This was the cash, but inflation and interest rates still hurt the bottom line. If only slightly.
So, after utility stocks climbed, they crashed. Now, utility stocks still offer a deal pretty much across the board, especially for companies that hold Dividend King status. That’s right, over 50 consecutive years of dividend increases. This comes from those long-term contracts and cash flow no matter what.
Yet perhaps the best deal for the best dividend these days is Canadian Utilities (TSX:CU). Canadian Utilities stock is the original Dividend King. It’s been growing steadily for decades, yet right now it offers a superb deal.
Shares trade at 14.51 times earnings, along with a 5.71% dividend yield as of writing. That’s far higher than average for the stock. Further, shares are still down by 12% in the last year, as of writing. So, if you’re looking for growth in shares and dividends, this is definitely one to consider — especially as the market continues to rebound, and utility stocks see an improvement among lower inflation and the easing of interest rates.
