Business & Investment

Two cheap stocks to buy now in 2022

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NS TSX index This year has been strong and many stocks are trading at high prices.However, certain sectors have poor performance and some of the top TSX stocks are also shown. Underestimation today.

Let’s take a look at two contrarian stocks to buy for our portfolio towards 2022.

Barrick gold

Barrick gold (TSX: ABX)(NYSE: GOLD) Is the world’s gold mining giant, with five of the top ten mines on the planet and another under development to join the club.

The company has recently coordinated a successful turnaround. At one point, Barrick Gold was at risk of being buried in debt of US $ 13 billion. Rising gold prices, selling non-core assets, and streamlining the corporate structure have helped management organize their balance sheets. In fact, Barrick Gold reached zero net debt in 2021.

Gold prices have fallen from the 2020 high of about $ 2,080 per ounce to the current $ 1,750. It’s still a very profitable price for Barrick Gold. The company reported that all-in maintenance costs for the second quarter of 2021 were just under $ 1,100 per ounce.

Barrick Gold is also a major producer of copper. Copper prices soared from $ 2 to $ 4.75 per pound earlier this year. Base metals are currently trading at nearly US $ 4.30 per pound. Barrick Gold’s second-quarter copper all-in-maintenance cost was $ 2.74 per pound. As a result, the copper business is also making significant profits.

Barrick is investing in resource growth, but much of the industry is simply reducing reserves. The new properties are located in Egypt, Guyana, Japan, Senegal and Tanzania.

Barrick Gold shares are trading close to $ 23 on the TSX Index, compared to a high of $ 40 in 2020. The fall in gold prices is expected to have some downsides, but oversold seems to be overkill.

The company pays a quarterly dividend of $ 0.09 per share. The board has tripled payments in the last three years, with the possibility of a more generous increase in 2022. In addition, Barrick Gold announced a special capital return of US $ 750 million in 2021. That’s $ 0.42 per share. Therefore, the annual yield of US $ 0.78 on this year’s payment is about 4.2% at the current stock price.

Sanko

Sanko (TSX: SU)(NYSE: SU) Shareholders were upset last year by cutting dividends by 55% to save cash during a pandemic. The move seemed wise at the time, as oil futures temporarily turned negative and fuel demand was depleted due to travel restrictions and the obligation to work from home.

Sanko’s share price fell from $ 44 before the pandemic to $ 15 last fall, when West Texas Intermediate (WTI) oil fell below $ 36 a barrel. Although Suncor’s cash flow surged due to the recovery in oil prices in 2021, the recovery in stock prices is still lagging behind its peers.

Suncor is trading for nearly $ 29 at the time of writing, so there’s still a long way to go to regain its early 2020 reputation. Several other major Canadian oil producers have hit new highs for the first time in years.

The removal of the travel ban and the delay in returning to the office in the coming months should benefit Suncor’s refining and retail business. The company is using additional cash in 2021 to repay debt and buy back shares. A significant dividend increase is expected in 2022.

Cheap stock earnings

Buying unloved stocks takes courage, but changing emotions can increase rewards. Barrick Gold and Suncor now appear to be undervalued and could bring significant profits in 2022.

Two cheap stocks to buy now in 2022

https://www.fool.ca/2021/10/13/2-cheap-stocks-to-buy-now-for-2022/ Two cheap stocks to buy now in 2022

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