2 highest value stocks I’d like to pick up in November

With so many investors looking at their portfolios and making huge gains in recent years, some may want to rebalance or exit certain high-flying areas. Of course, the long-term mantra of investing, which is to let the winners run, is a strategy that has worked spectacularly well lately. But at some point, undervalued stocks tend to see their performance converge with that of growth stocks, especially as investors become increasingly concerned about the overall macroeconomic backdrop.

Clearly we are not in such a situation yet as many growth stocks are still doing well. But I think there’s probably a reckoning coming for investors who took on too much risk.

For those on the more defensive end of the risk spectrum, here are two value stocks that I think are crying out for bargains in November.

Suncor Energy

Shares of one of Canada’s largest and most dominant energy producers, Suncor Energy (TSX:SU), have had a bumpy ride over the past five years.

Of course, much of this volatility is due to commodity prices, which have gone all over the place. When Western Canadian Select (the price oil producers like Suncor receive) last reached $100 per barrel in 2022, Suncor’s stock price rose to a multi-year high of around $45 per share.

However, investors will note that Suncor’s share price is significantly higher at around $50 per barrel for Western Canadian Select (where these prices are now), around $60 per barrel. This indicates that investors view the company (and its low breakeven price per barrel) as a more mature and stable business than in the pandemic-induced era of volatility we saw play out.

If you are a long-term investor looking for stable dividend stocks trading at a very reasonable valuation relative to earnings potential, Suncor and its 14 times earnings multiple looks cheap to me right now.

Toronto Dominion Bank

Despite rising nearly 50% over the past year, shares of Toronto Dominion Bank (TSX:TD) are still trading at rock bottom prices.

With a price-to-earnings ratio of less than ten times, investors suggest TD Bank’s recent rise may not be justified. If this stock maintains its historical multiple of around 12 times, there is an implied upside potential of 20% if this company returns to its long-term average.

I think such a move is likely given TD’s strong market share in the key Canadian and US markets, as well as its growth potential and value as a dividend stock. With a current yield of 3.7%, TD’s total return potential appears unparalleled in the world of Canadian equities. This remains one of my top picks for these reasons.