Canadian stocks have done well in the first half of this year. the TSX is up 5.5 per cent year-to-date. However, it’s not very comparable to the 17% return of the S&P 500. If you’re looking for some long-term outperformers, here are two great value stocks to buy in the second half of 2024.
Cenovus Energy (TSX: CVE) isn’t your typical long-term stock pick. However, it appears to have some strong catalysts for the second half of this year and beyond.
Cenovus is one of Canada’s largest integrated energy companies. After a few tough years, the company’s refining business is just getting off the ground. With oil prices above $80 a barrel, the company is generating a lot of free cash flow. Cenovus has been using that cash to reduce its $4 billion long-term net debt. The company is likely to achieve this goal in the second half of 2024. Once it does, it plans to return all of its idle cash flow to shareholders.
Cenovus is known for strong dividend growth, special dividends and share buybacks. With a 2% dividend yield and a P/E ratio of 7.4x, Cenovus looks like an attractive buying opportunity.
Shares of Calian Group (TSX: CGY) are not doing well. The stock is down 5% in 2024 and 12% in the last 52 weeks. The stock is starting to look very cheap. Calian has a diversified and resilient portfolio of businesses in healthcare, training, cybersecurity, and advanced technology, and is a prime contractor for governments and agencies.
The company has delivered high revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) growth over the past five years. Recent acquisitions may help support EBITDA growth of 30 per cent by 2024. Margins have been gradually improving, benefiting from cross-selling opportunities on the platform.
This stock is trading at a P/E ratio of just 10x. The company has been buying back shares. With an 8% free cash flow yield and a 2% dividend yield, it’s attractively valued at today’s price. If the company can continue to meet its goals, this stock could start to turn around in the second half of 2024.
