5 Cheap Canadian Stocks To Buy Before The Market Notices

Despite the persistent market volatility that weâve seen this year, the market, for the most part, cooperated. And while those returns have been decent, there are opportunities on the market for investors to grab some cheap Canadian stocks right now.

To clarify,  these cheap Canadian stocks arenât broken businesses. They are businesses that are overlooked right now as the market remains obsessed with higher-growth momentum.

For long-term investors, that apparent disconnect can be a gift. Hereâs a look at five of those cheap Canadian stocks that stand out today and could provide significant upside over the longer term.

Option #1: The beaten-down telecom

Canadaâs telecoms are known for their defensive appeal and reliable dividends. In recent years, however, that view has shifted as stubborn interest rates have made these capital-intensive businesses drag the market.

As a result, the market has focused on those shorter-term challenges rather than long-term potential. And in the case of Telus (TSX:T), that drag has caused the stockâs yield to push to near double-digits.

Despite that dip in share price, Telus continues to generate strong recurring revenue from its core segments. The telecomâs technology subsidiary, Telus International, also provides a growth avenue that the market is currently discounting.

In other words, Telus is overdue for a recovery. In the interim, investors can enjoy the 9.7% yield the telecom offers.

Option #2: A big bank turnaround story hiding in plain sight

The big bank stocks are rarely considered cheap Canadian stocks by any measure. That being said, Bank of Nova Scotia (TSX:BNS) has lagged its big bank peers for years.

Part of the reason for that is Scotiabankâs international exposure to developing markets that were at higher risk, which led to inconsistent performance. That left Scotiabank trading at a discount compared to its peers.

Scotiabank shifted its focus recently away from those developing markets to more mature North American markets. That transition isnât happening overnight, but the stock price still hasnât fully priced that shift in.

As a result, Scotiabank remains one of the cheap Canadian stocks to own and offers investors the highest yield among the big banks.

Option #3: Cash flow strength the market is ignoring

The next pick among the cheap Canadian stocks to consider is Suncor (TSX:SU). Suncor has spent years rebuilding itself following operational setbacks and inconsistent performance.

Recent improvements suggest that Suncor has turned a corner. Strong oil prices are supporting cash flow, and Suncor is using that cash to buy back shares and hike its dividend, which currently sits at a yield of 2.8%.

That fact alone makes Suncor one of the cheap Canadian stocks in the oil sector thatâs hard to ignore.

Option #4: Global growth at a value price

Another option for investors to consider is Restaurant Brands International (TSX:QSR). Thatâs the name behind several well-known quick service food brands such as Tim Hortons, Burger King, and Popeyes.

Restaurant Brands has been investing heavily in modernizing its stores and digital presence. Thatâs all in support of driving long-term growth and further international expansion.

And despite its growing global footprint and improving fundamentals, Restaurant Brands trades at a valuation that doesnât reflect its substantial earnings potential.

As those modernization efforts continue to pay off, the stock could see a bump over the longer term.

Option #5: An underrated highâquality compounder

Brookfield Asset Management (TSX:BAM) rounds out the list of cheap Canadian stocks that are flying under the radar right now. Brookfield is one of the worldâs leading alternative asset managers, generating stable, feeâbased revenue across infrastructure, real estate, renewable power, and private equity.

Even in this higher-rate environment, Brookfield has continued to raise capital and expand its global platform.

Despite that potential, the stock still trades below what most consider its true value. This makes it an opportune time for long-term investors.

Why these cheap Canadian stocks could outperform

The five companies mentioned above share a common theme: They all boast solid fundamentals paired with valuations that donât reflect their longâterm potential.

That makes them underrated picks for investors looking for long-term growth potential once the current sentiment shifts.

In my opinion, one or all of these stocks should be core holdings as part of a larger, well-diversified portfolio.

The post 5 Cheap Canadian Stocks to Buy Before the Market Notices appeared first on The Motley Fool Canada.

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Fool contributor Demetris Afxentiou has positions in Bank of Nova Scotia. The Motley Fool recommends Bank of Nova Scotia, Brookfield Asset Management, Restaurant Brands International, and TELUS. The Motley Fool has a disclosure policy.