2 Top Canadian Value Stocks in June 2023

Canadian investors who seek to add stable, high-yield passive income sources to their portfolios should check out undervalued TSX value stocks in June 2023. Value stocks are best known for their low stock prices given their recurring profits and cash flows. Investors could lock in juicy dividend yields on two favourite names this month.

Canadian bank stocks and real estate investment trusts (REITs) fit the value stock basket very well in June. Their swollen dividend yields catch an income investor’s eye, while their low price points invite a value investor’s scrutiny.

Canadian Imperial Bank of Commerce, (TSX:CM) or CIBC stock, and CT Real Estate Investment Trust (TSX:CRT.UN) are my two top Canadian value stocks to buy in June. They are cheap dividend growth stocks with solid profitable business lines that generate positive free cash flows. They will not be left behind in a broader market rally when recession fears finally give way to bullish enthusiasm.

CIBC stock

The Canadian Imperial Bank of Commerce, affectionately known as CIBC, is my favourite Canadian bank stock to buy and hold in 2023, and a top TSX value stock to scoop up in June following an earnings beat in May.

Despite concerns for a near-term mild recession in Canada, CIBC’s second-quarter revenue of $5.7 billion showed a 6% surge while $1.7 billion in quarterly net earnings represented strong 11% growth year over year. Adjusted net earnings per share of $1.70 beat analyst estimates by 4.3%, validating insiders’ purchases of CIBC stock earlier this year. CIBC remains a strong-performing Canadian bank stock, even as rising provisions for credit losses eat into its earnings in 2023.

Higher provisions for loan losses could show deteriorating loan book quality – that’s true. However, higher provisions are also a testament to Canadian banks’ prudent risk management practices. Banks may reverse them as economic outlooks change.

TSX bank stocks got dragged into the U.S. regional banking fiasco this year. As valuations declined, CIBC stock price dropped 9% off its highs so far this year.

I love CIBC stock for the outsized dividend yield that swelled in 2023. CIBC raised its quarterly dividend by 2.4% last month. The new $0.87 per share quarterly dividend should yield 6.1% annually. The bank paid out 50% of its adjusted earnings last quarter. Its dividends remain well covered and they have a fair chance of surviving a potential economic slowdown.

CIBC stock should form part of core portfolio holdings in an uncertain market.


CT Real Estate Investment Trust is one of the best Canadian REITs to buy in June 2023 as it undergoes temporary weakness. Publicly traded real estate stocks took some beatings as the Canadian housing market fumbled toward a bottom in 2023. Commercial properties are trading at cheap valuations not seen in years, and investors have a chance to buy the dips before real estate prices recover.

In a strong show of confidence in the trust’s growing cash flow generation capacity, management recently raised the trust’s monthly distributions by 3.5% in May. You should buy CT REIT units before June 30, 2023 to receive the raised distribution. The new distribution should yield a juicy 6% annually for investors who buy CT REIT units at current prices of around $15.10 per unit.

CT REIT is the landlord to Canadian Tire, a dependable, investment-grade-rated tenant that demands more retail space as it expands. The REIT’s portfolio is fully occupied. It has pre-leased its current development projects to a 99.4% committed occupancy by March of this year. The trust’s portfolio should thrive during a housing market downturn (which seems to abate anyway). The REIT’s rental income and cash flows should remain stable in a recession.

Further, CT REIT pays one of the safest distributions in the Canadian REIT industry today, given its low payout rate of adjusted funds from perations (AFFO) of 73.8% during the first quarter of this year. A distribution cut on CT REIT should be an income investor’ least worry right now.

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See the 5 Stocks
* Returns as of 5/24/23

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.