Written by Robin Brown at The Motley Fool Canada
The 2022 bear market has created significant buying opportunities for value-conscious investors. I would say that traditional “value” stocks have become somewhat expensive, but there are plenty of solid growth and income stocks that look attractive. Here are three TSX stocks that seem to present attractive buying opportunities right now.
Brookfield Asset Management Shares
Brookfield Asset Management (TSX: BAM.A) fell 22% in 2022. Over the past five days it has seen a strong +15% rally, but it still looks like an attractive buy for long-term investors. Brookfield is one of the largest alternative asset managers in the world.
It has $750 billion in assets under management (AUM). Earlier this fall, management outlined a plan to reach $2 trillion in assets under management over the next five years. During its recent third quarter, Brookfield Chief Executive Officer (CEO) Bruce Flat noted that if Brookfield could execute on its plan, he believed it could achieve compound annual growth of 25% (or better). profits over the next five years.
While that sounds extremely optimistic, Brookfield has a pretty good track record for doing what it says it will do. With $125 billion in deployable capital, Brookfield certainly has the ability to be opportunistic in times of economic downturn.
Currently, Brookfield shares are trading at a 42% discount to their plan value. Plans to spin off its asset management business could help unlock some of that value disconnect, so now is a great time to buy those stocks.
I wouldn’t classify Fortis (TSX:FTS) as a traditional value stock. However, given its stock’s 13% decline this year, it now presents an attractive value. With a market capitalization of $25 billion, Fortis is a major regulated energy transmission company in Canada, the United States and the Caribbean.
Fortis is a dividend legend in Canada. It has increased its dividend consecutively for 49 years. More recently, it increased its dividend by 6% last quarter. Today, it trades with a dividend yield of 4.3%. That’s above its five-year average return of 3.6%. It trades with a Price/Earnings (P/E) ratio of 18; however, this is below his ten-year average of 19.
Fortis is a very coherent public service with a defensive economic model. Whenever it can be bought at a high dividend yield and a valuation discount, it presents an attractive opportunity for income-oriented investors.
A true growth stock that remains incredibly cheap is easy (TSX: GSY). While it’s down 27% this year, it’s increased more than 300% over the past five years. In fact, it’s been one of the best performing growth stocks in Canada over the past decade.
goeasy operates a subprime lending platform across Canada. The company has grown by taking market share and adding several service verticals over the years. It has just announced its third quarter results and recorded record loans of $641 million. This is a 47% increase over last year. Adjusted net earnings per share rose 9% to a record $2.95.
Today, this stock generates a dividend yield of 3% and trades for only eight times forward earnings. On a growth-value-income basis, it’s hard to find a TSX stock with better value today.
The post 3 Top Value Stocks Who Are Screaming Buys Right Now appeared first on The Motley Fool Canada.
Before you consider Brookfield Asset Management, you’ll want to hear this.
Our market-beating team of analysts just revealed what they think are the 5 best stocks for investors to buy in November 2022…and Brookfield Asset Management was not on the list.
The online investing service they’ve operated for nearly a decade, Motley Fool Stock Advisor Canada, beats the TSX by 15 percentage points. And right now they think there are 5 stocks that are better buys.
See the 5 Actions * Returns from 04/11/22
Foolish contributor Robin Brown holds positions at Brookfield Asset Management Inc. CL.A LV and goeasy Ltd. The Motley Fool recommends Brookfield Asset Management, Brookfield Asset Management Inc. CL.A LV and FORTIS INC. The Motley Fool has a disclosure policy.