WELL:CC - Top 3 Most Undervalued Stocks in 2022
The ongoing bear market has created plenty of opportunities for investors. Stock valuations are now lower than they’ve been in several years. If you’re lucky enough to have some spare cash, here are the top three most undervalued stocks that should be on your radar.
RioCan
The bear market isn’t restricted to stocks. Bonds, commodities, and real estate have been losing value too. Some experts believe Canada’s real estate bubble is finally ready to pop.
However, it’s important to know that the bubble was in residential real estate , not commercial. Commercial properties such as grocery stores, offices, and malls suffered a bear market in 2020. Many of these units haven’t recovered their value since the lockdowns. As a result, commercial landlords like RioCan Real Estate Investment Trust (TSX:REI.U) are severely marked-down.
RioCan stock trades at just 10.9 times earnings per share. The company is on track to generate $1.6 in funds from operation (FFO) per unit. That means the price-to-FFO ratio of each unit is 12.8. RioCan delivers some of this to unitholders in the form of a 5% dividend yield .
I expect rents and occupancy to steadily climb in the years ahead. Malls and stores have fully reopened, while RioCan has a significant pipeline of future development that could bolster net income. By 2026, the portfolio will be more balanced between commercial and residential.
Put simply, RioCan is undervalued and should be on your radar.
Power Financial Corp.
Power Financial Corp. ( TSX:POW ) is an underrated financial giant. The company’s subsidiaries such as Great-West Life Co. and IGM Financial are market leaders in their sectors. Meanwhile, Power Corp also has exposure to emerging FinTech startups such as Wealthsimple through its venture capital subsidiary Portag3.
Steady expansion in new verticals and regions has turned this company into a financial juggernaut. Operations are spread across Europe, Asia and North America with services ranging from wealth management to insurance.
Power Corp’s stock dropped 19% year to date along with the rest of the financial sector. It now trades at just 9 times earnings. That implies an 11% earnings yield. The dividend yield is 5.9% ,which is also impressive.
WELL Health Technologies
Telehealth sounds like an old story. During the pandemic, virtual healthcare services and online pharmacies saw a surge in users. However, this growth isn’t likely to fade with the lockdowns ending. After all, speaking to a doctor online or getting medicines delivered home is more convenient.
That’s why WELL Health Technologies ( TSX:WELL ) is still clocking in tremendous growth numbers. Quarterly revenue was up 127% year over year in the most recent quarter. The company delivered $17.2 million in adjusted net income compared to a $1.2 million adjusted net loss in the same quarter from last year.
Management says the company is on track to generate $550 million in annual revenue. Meanwhile, the company’s market value is just $788 million. That’s a price-to-revenue ratio of 1.4 – much lower than other tech firms.
If you’re looking for a long-term bet on the growth in healthcare technology, this stock should certainly be on your watch list.
The post Top 3 Most Undervalued Stocks in 2022 appeared first on The Motley Fool Canada .
Fool contributor Vishesh Raisinghani has positions in WELL Health Technologies Corp. The Motley Fool has no position in any of the stocks mentioned.
2022