Canadian stocks are often considered a bargain because they combine the best of both worlds: strong fundamentals and attractive valuations. While the Canadian market is rich in natural resources, financial services, and increasingly tech, these stocks typically trade at lower price-to-earnings ratios compared to United States counterparts.
This means investors can snag quality companies at a discount, all while benefiting from solid dividends and the stability of a well-regulated market. Plus, with the Canadian dollar often trading lower than the U.S. dollar, international investors might find even more value when converting their gains back to their home currency. So let's get into some stocks Canadians should check out on the cheap.
NorthWest REIT
NorthWest Healthcare Properties REIT (TSX:NWH.UN) looks like a bargain for income-focused investors, especially with its hefty dividend yield. Currently, the stock offers a forward annual dividend yield of over 7.1%, which is quite appealing in today's market. Despite the challenges in the real estate sector and a significant drop in its share price over the past year, this real estate investment trust (REIT) continues to pay out a strong dividend. The combination of a lower share price and solid dividend yield can make NWH.UN a value play, especially for investors who believe in the long-term stability of healthcare properties.
What makes NWH.UN particularly interesting is that its stock is trading below its book value. This means investors are essentially getting a discount on the company's assets. Coupled with the fact that healthcare real estate tends to be more recession-resistant, this adds an extra layer of security for those looking to invest in a sector with stable demand. While there are risks, such as the high payout ratio and significant debt, the current valuation suggests that the market may be underestimating the long-term potential of this REIT.
Crombie REIT
Crombie REIT (TSX:CRR.UN) also looks like a bargain for investors who love reliable income, particularly because of its juicy dividend yield. Currently offering a forward annual dividend yield of just over 6%, Crombie provides a steady stream of income. With a strong track record of consistent dividend payments and a payout ratio that suggests sustainability, CRR.UN stands out as a solid choice for those looking to add some income-focused stability to their portfolio.
What makes Crombie even more appealing though is it's trading at a reasonable price relative to its book value, suggesting that investors are getting good value for their money. Despite the challenges in the broader market, Crombie has managed to maintain solid profitability and cash flow. And this supports its dividend payouts. With the stock trading near its 52-week highs but still offering a yield that's hard to ignore, CRR.UN presents itself as a compelling bargain for those who want to invest in a reliable, income-generating Canadian stock.
Sienna
Sienna Senior Living (TSX:SIA) is at bargain-basement prices for those on the hunt for a stable dividend in the healthcare sector. With a forward annual dividend yield of just 6%, SIA offers an attractive income stream, especially for investors seeking reliable returns. Despite operating in a challenging environment, SIA has managed to maintain its dividend. This speaks to the resilience of its business model focused on senior living and care. The steady payout, combined with the company's strong quarterly earnings growth of over 36% year-over-year, suggests that SIA is well-positioned to continue rewarding its shareholders.
Plus, SIA's stock price has seen a significant increase over the past year, yet it still trades at a reasonable valuation, making it a potentially undervalued gem in the market. The company's ability to generate consistent cash flow, coupled with its commitment to returning value to shareholders through dividends, makes it an appealing option for those looking to invest in a stable, income-generating Canadian stock. Despite the high payout ratio, SIA's strong financials and the essential nature of its services provide confidence that its dividends can remain robust. This makes it a compelling choice for dividend-focused investors.
