3 Top Canadian Stocks to Buy Right Now

Here are three top picks I’d recommend investors consider in this overvalued market today.

| More on:
stock data

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Finding stocks that are undervalued is a difficult task, in any environment. Indeed, given the bull run we’ve seen in equity markets of late, valuations are stretched. Investors have to search harder to find pockets of value in today’s market.

However, there are pockets of value. And on the TSX, there happen to be quite a few. Here are three companies I’d definitely put in the undervalued bucket right now.

Kirkland Lake Gold

Yes, gold has been beaten to a pulp as of late. The price levels of the commodity are still well below all-time highs last year. However, it appears gold is making a comeback of late.

In this environment, I think Kirkland Lake Gold (TSX:KL)(NYSE:KL) will outperform. For those who believe gold is likely only starting its bull market run, Kirkland Lake is a top choice.

However, there are other reasons I like this stock.

When it comes to fundamentals, there are few gold producers that can compete with this Toronto-based company. Kirkland Lake recently reported year-over-year earnings growth of 38%. Moreover, it recorded 68% year-over-year increase in revenue. It has a valuation multiple of approximately 13-times earnings, which is too cheap for investors to ignore.

Additionally, recent drilling results at Detour Lake have been quite positive. Thus, Kirkland Lake appears to be a no-brainer investment, in my view.


Fortis Inc. (TSX:FTS)(NYSE:FTS) has continued to be one of my top dividend picks for quite some time. This company has provided investors with consistent dividend increases. Scratch that. Fortis is among the best dividend growth stocks on the market today.

Currently, the stock has a dividend yield of a 3.6%. On its face, this dividend yield might not seem overly attractive. However, given the track record of nearly five decades of dividend increases, long-term investors have done quite well holding this stock long-term.

The company’s valuation is similarly attractive in this environment. Trading at roughly 21 times earnings, this is a reasonably valued stock in a market that’s otherwise overpriced.


Now, in terms of valuation, Shopify certainly won’t make most investor’s “undervalued” lists. And for good reason. This stock is still trading at nosebleed valuation levels.

However, I think the recent dip in Shopify stock is an attractive buying opportunity for growth investors. Today, the market is pricing in a deceleration of growth with this stock coming out of the pandemic. The degree to which Shopify’s stock has sold off is the issue at play here, in my view.

For investors seeking growth-at-a-reasonable price (or at least a “more reasonable” price), Shopify fits the bill today. This company is poised for long-term growth, and I think remains one of the best growth options on the TSX today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool recommends FORTIS INC.

More on Dividend Stocks

Doctor talking to a patient in the corridor of a hospital.
Dividend Stocks

1 U.S. Stock to Buy That Could Make You a Millionaire

Even though tech stocks are usually the go-to growth picks in the US stock markets, there are quite a few…

Read more »

Increasing yield
Dividend Stocks

My 3 Favourite TSX Dividend Stocks Right Now

These dividend stocks have been a favourite for a while, but even more so now that they trade at such…

Read more »

funds, money, nest egg
Dividend Stocks

New Investors: The 2 Best Options To Earn Regular Passive Income!

You can earn high passive income with dividend stocks like the Toronto-Dominion Bank (TSX:TD)(NYSE:TD).

Read more »

Dividend Stocks

This Canadian 6%-Yielder’s On Sale, But Not for Long!

SmartCentres REIT (TSX:SRU.UN) is a wonderful high-yielding REIT that has a higher yield and lower valuation than most its peers.

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

This 1 Canadian Dividend Stock Could Help You Earn Over $100 Per Week in Passive Income

This dividend stock won’t disappoint you if you want to earn reliable passive income in Canada -- equivalent to more…

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Dividend Stocks

TFSA Passive Income: 2 Monthly Dividend Stocks for Canadian Retirees to Buy Now

Retirees seeking tax-free monthly dividends can now buy high-yield stocks at cheap prices for a TFSA focused on passive income.

Read more »

financial freedom sign
Dividend Stocks

3 Selloff Stocks That Could Help Set You Up for Life

Here are three selloff stocks to buy for those who believe that these companies can growth through a rising interest…

Read more »

money cash dividends
Dividend Stocks

Passive Income: Get Over $430 in Dividend Income Every Month

These two top dividend stocks could provide substantial monthly cash flows to supplement your active income.

Read more »