1 $ 2 Dirt-Cheap Stock To Buy During Market Crash: It Might Even Make You A Millionaire

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On Tuesday, the market continues to slump, as US and Canadian tech stocks plunged for the third day in a row. As of 12 p.m. ET, the S & P / TSX Composite Index was down nearly 8% for the day, as shares of tech companies fell 2.2%. Apart from the technology industry, energy and financial services are two of the worst performing sectors today.In the midst of the ongoing stock market crash, it becomes even more important for investors to diversify their investment portfolios and add high value stocks.

The global energy industry

The global energy industry experienced its most difficult phase for decades in 2020. COVID-19-related shutdowns across the world have caused a massive drop in demand for oil. At the same time, worries about oversupply seriously damaged the feelings of oil investors, pushing oil prices to their lowest level in decades in April.

WTI crude oil is currently trading at $ 37 per barrel – far below its January high of $ 65.60 per barrel. This sudden drop in oil prices also caused a strong selloff in energy stocks, making energy stocks cheap.

Recovery in demand for oil

Nonetheless, energy demand has already started to recover gradually – supported by the reopening of economic activities and OPEC + production cuts, among other factors. These factors have contributed to the steady recovery in oil prices for four consecutive months (May to August 2020).

Despite the recent recovery in oil prices, shares of many energy companies are still very cheap.

Cheap energy stock

Regarding energy stocks, I find the Canadian energy transportation company Enbridge (TSX: ENB) (NYSE: ENB) to be one of the best because it offers a strong dividend yield of 7.9% – much higher than that of many of its competitors.

In addition, its stable profit margins – despite the ongoing pandemic – make Enbridge shares attractive. The company reported a nearly 40% year-over-year drop in second-quarter revenue to about $ 8 billion. However, its adjusted net profit margin increased significantly to 14.2% in Q2 2020, from 10.2% a year ago. It was also better than its profit margin of 13.9% in the previous quarter.

But it could be a better bet

There is another cheaper energy store that I wanted to highlight here – Crescent Point Energy (TSX: CPG) (NYSE: CPG). It is a Calgary-based oil and gas exploration company with a market capitalization of $ 1.1 billion.

The massive declines in its earnings have led to a huge selling frenzy of Crescent Point Energy’s stock in recent quarters. The company reported earnings per share of $ 1.89 in fiscal 2019. Most of Bay Street doesn’t expect it to turn profitable until fiscal 2022.

However, there is a recent development that could push CPG shares back up in the coming months. On September 1, Crescent Point Energy gave a largely positive 2020 budget direction. According to the press release, he expects production to increase by around 20% in the second half of 2020 due to the reactivation of closed volumes. Additionally, the company expects its capital spending to be around the lower end of its earlier forecast.

Likewise, CPG estimates that the positive trend in production will continue in fiscal 2021 based on its preliminary forecast. These are some of the factors that could cause Crescent Point Energy’s stock to go up in the coming months and quarters.

Take away idea

Crescent Point Energy is currently trading at $ 1.93 per share – which is really cheap, in my opinion – when you look at the company’s improving production volume. So if you buy this stock in large quantities and hold it long enough, it has the potential to make you a millionaire.

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Silly contributor Jitendra parashar has no position in any of the listed securities. The Motley Fool owns shares and recommends Enbridge.

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