The market environment is creating many opportunities, as long as you’re a long-term investor. As stocks sell off significantly, there is a tonne of value for Canadian investors looking to buy the best stocks and hold for the long haul.
These opportunities only present themselves so often, so it’s crucial to take advantage. However, to truly realize the power of buying such high-quality companies at attractive prices, you have to be willing to be patient and own these companies for years, as they continue to grow their operations and see their stocks return to full value.
So, if you’re looking to use this opportunity to buy high-quality stocks trading well undervalued that you can own for decades to come, here are two of the best to buy now.
One of the best Canadian value stocks to buy for years has been Corus Entertainment (TSX:CJR.B), as it’s constantly traded below fair value in recent years. However, it too has been caught up in the recent market selloff and is now trading so cheaply it can’t be ignored.
At just $3.92 a share, where the stock closed trading on Thursday, Corus has a forward price-to-earnings (P/E) ratio of just 4.7 times. And since its debt has been an issue in the past, it’s worth pointing out that if you look at its forward enterprise value-to-EBITDA ratio, it’s just 4.5 times which is also extremely low.
Of course, much of the reason Corus and the rest of the market have sold off is due to the risk of a recession on the horizon. However, given Corus’s ability to consistently generate attractive cash flow and considering how cheap it is today, investors can buy the value stock with confidence, as it offers a massive margin of safety.
In just the last two years, Corus has generated more than $550 million in free cash flow, yet its market cap today is less than $800 million. If you have the patience to hold for years and are looking for some of the top value stocks to buy, Corus is one you’ll certainly want to check out.
One of the best defensive stocks to buy, offering a tonne of value at this price
In addition to Corus, if you’re looking to shore up your portfolio and add a reliable and defensive business to your portfolio, Algonquin Power and Utilities (TSX:AQN)(NYSE:AQN) has gotten a lot cheaper recently.
Algonquin is an attractive business because its utility segment, which is already low risk and makes up nearly three-quarters of its operations, is diversified well both by geography and by the services it offers.
In addition, Algonquin has green energy generating assets which offer synergies but, more importantly, a tonne of long-term growth potential.
Therefore, as the stock has become much cheaper lately, it certainly looks like one of the best value stocks to buy. Not only is it cheap relative to other utilities, but Algonquin hasn’t been this undervalued since mid-2018.
Right now, Algonquin trades at a forward P/E ratio of just 16.8 times. That’s well below its five- and 10-year average of 19.4 and 21.6 times, respectively.
In addition, the dividend-growth stock offers an attractive yield after falling so much in price, now at more than 5.5%. That’s well above its 10-year average of 4.7% and just about the highest that it’s been over the last decade.
Therefore, if you’re looking to buy top defensive stocks for your portfolio but don’t want to overpay, Algonquin looks to be offering investors a tonne of value trading below $17 a share.
