There are still some undervalued stocks out there for Motley Fool Canada investors to find. However, with the economy reopening those opportunities are becoming less and less. All it takes is digging into the fundamentals for whether a stock is cheap and set to grow. So with that in mind, let’s look at four options to consider before you run out of time!
My first choice of undervalued stocks has to be goeasy (TSX:GSY). The $2.59 billion company has been around for decades in the tech sector, offering financial and rent-to-own services for customers. But its product innovation and low interest rates in the last year have made the company reach record-setting revenue.
Shares are up 195% in the last year alone, but 20,524% since coming on the market in 1990! That length of time means it also offers a dividend, small at 1.66%, but with a compound annual growth rate (CAGR) of 18.14%. And it’s still one of the best undervalued stocks, with a price-to-earnings (P/E) ratio of 12, and an RSI fairly valued at 62. But that won’t last long, with analysts predicting a potential upside of 27% in the next year alone!
Some Motley Fool Canada investors may think the Big Six Banks are done growing, but that’s not the case with Toronto-Dominion Bank (TSX:TD)(NYSE:TD). Yes, the company saw strong gains during the last year with provisions for loan losses, coupled with people saving and paying down loans. Now with higher interest rates and a rebounding economy, the company can get back on track to growing its online presence and credit card acquisitions.
Shares of the company are up 50% in the last year and 214% in the last decade for a compound annual growth rate (CAGR) of 12.11%. Yet even as it hits all-time highs, analysts predict a further potential upside of up to 16% as of writing. And it still offers a valuable 11.2 P/E ratio, and RSI of just 42, far closer to oversold territory. So this is definitely another of the undervalued stocks I’d consider.
The healthcare industry proved its worth during the pandemic, and NorthWest Healthcare Properties REIT (TSX:NWH.UN) proved it’s one of the underestimated undervalued stocks. The company saw rent come in at 98.6% during that time. It also has over 98% global occupancy and a 14.3 average lease agreement. But the company continues to grow, recently acquiring properties in the Netherlands, and an Australian healthcare REIT.
Shares are up 29% in the last year, yet the company still boasts a 10.7 P/E ratio and 46 RSI to boot. And on top of that, you get a whopping 6.19% dividend yield as of writing, that comes out on a monthly basis. Yet analysts are giving a potential upside of up to 13% as of writing. So this is definitely one of the undervalued stocks you’ll want to add more of again and again.
Finally, I’m frankly surprised to be listing Alimentation Couche-Tard (TSX:ATD.A)(TSX:ATD.B) as one of the final undervalued stocks. The company is now a worldwide operation that’s seen revenue slowly rise and the pandemic comes to a close. During its latest earnings report, with net earnings rising 10.6% year over year, and even fuel consumption finally on the rise again with oil and gas demand going up.
This is only going to get higher and higher as the world reopens. That’s why I’d consider this a top choice among undervalued stocks. Shares are up just 4% in the last year, but 911% in the last decade for a CAGR of 26%!
And you can still pick it up today at a P/E ratio of 15.23, well within value territory. But that may not last long, with analysts giving a potential upside of up to 29% as of writing.
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 Amy Legate-Wolfe owns shares of NORTHWEST HEALTHCARE PPTYS REIT UNITS and TORONTO-DOMINION BANK. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.