WELL:CC - Value Investors: Take a Look at These 5 TSX Stocks Trading at a Discount
2023-05-08 18:15:00 ET
It’s no secret that over the last year, value investors have had an incredible opportunity to buy stocks all across the TSX while they trade at significant discounts.
That’s often the case when the broader market sells off, and even the highest-quality stocks lose value and offer incredible entry points for investors.
If you’re looking to add some of these top stocks to your portfolio before the market eventually recovers, here are five TSX value stocks to buy today — each from a different sector of the market.
A top TSX value stock in the retail sector
One of the first TSX value stocks to consider is Canadian Tire ( TSX:CTC.A ): the popular retail company with stores across Canada.
Canadian Tire stock lost a tonne of value, as the market sold off throughout 2022, when inflation was surging, and fears of a potential recession were high.
However, Canadian Tire has continued to adapt and perform well, which has already led to its small recovery to start off 2023.
Even after gaining more than 19% year to date, though, the TSX value stock still trades at a forward price-to-earnings (P/E) ratio of just 10.1 times below its five and 10-year averages of 11.1 and 12.9 times, respectively.
One of the best gold stocks to buy and hold in your portfolio
Another stock that is still trading cheap, especially considering the momentum that gold prices have today, is B2Gold ( TSX:BTO ).
With interest rates appearing to be peaking, gold has unsurprisingly started to rally, giving high-quality and low-cost gold producers like B2Gold a tonne of momentum.
Therefore, the TSX value stock is one of the best to buy now, as gold prices continue to push higher, but also since it currently trades at a forward enterprise value (EV) to earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio of just 4.75 times.
That’s roughly in line with its five-year average EV-to-EBITDA ratio. However, it’s well below its 10-year average, plus, at just $5.50 a share, the stock also has a dividend yield of roughly 4%.
A top healthcare tech stock with massive growth potential
Tech stocks have been some of the cheapest stocks on the market, making a high-quality growth stock like WELL Health Technologies ( TSX:WELL ) one of the best investments you can make.
WELL is a top TSX value stock because, through 2021 and 2022, its stock price only continued to lose value while the company’s revenue grew rapidly and consistently outpaced analyst expectations.
Therefore, even though the stock price is up more than 100% year to date, WELL is still undervalued, trading at a forward price-to-sales ratio of just 2.1 times — considerably lower than its three-year average of 5.3 times.
A top TSX value stock in the financial sector
Another unbelievable TSX growth stock that offers tonnes of value today is goeasy ( TSX:GSY ), the specialty finance stock.
goeasy has faced more headwinds than WELL, but also offers a lot more recovery potential than WELL, especially since it’s continued to lose value in 2023, down over 10% so far year to date.
In fact, the stock offers so much value it now trades at a forward P/E ratio of just 6.5 times. That’s unbelievably cheap compared to its three- and five-year averages of 11.5 and 10.6 times, respectively.
The last time goeasy was this cheap was in 2020, when its revenue was more than 30% lower than where it is today.
A top real estate stock trading significantly undervalued
Finally, there are plenty of value stocks on the TSX that you can find in the real estate sector, especially ones that deserves a growth premium like InterRent REIT ( TSX:IIP.UN )
InterRent has been one of the top residential REITs to buy for its growth potential and, over the last five years, it has traded with an average forward price to adjusted funds from operations (P/AFFO) ratio of 31.6 times.
Today, however, InterRent has a forward P/AFFO ratio of below 27 times. Furthermore, its distribution had an average yield of just 2.25% over the last five years, whereas today, it sits 50 basis points higher at roughly 2.75%.
Therefore, if you’re looking for a high-quality TSX stock that you can buy and hold for years, InterRent is one of the many Canadian stocks offering attractive value today.
The post Value Investors: Take a Look at These 5 TSX Stocks Trading at a Discount appeared first on The Motley Fool Canada .
Fool contributor Daniel Da Costa has positions in B2Gold, Goeasy, InterRent Real Estate Investment Trust, and Well Health Technologies. The Motley Fool recommends B2Gold. The Motley Fool has a disclosure policy .
2023