3 Undervalued Canadian Stocks to Add Before They Jump

Investors looking for undervalued Canadian stocks have come to the right place: we’ve got three of the best such options listed here.

| More on:
stocks rising

Image source: Getty Images

Finding value in today’s market is the goal of most investors. However, given where valuations are today, it’s an ambitious goal. That said, there happen to be a number of undervalued Canadian stocks just begging to be bought today.

In this article, I’m going to highlight why Alimentation Couche-Tard (TSX:ATD.A)(TSX:ATD.B), Manulife (TSX:MFC)(NYSE:MFC), and Killam Apartment REIT (TSX:KMP.UN) fit this description. Indeed, these are stocks I’ve been pounding the table on of late. Here’s why.

Top undervalued Canadian stock: Alimentation Couche-Tard

Couche-Tard is perhaps one of the best value picks on the TSX right now.

This company’s a key global player gas station and convenience store business. Indeed, over the years, Couche-Tard has developed best practices in its sector, consolidating relatively fragmented corners of the market. The result has been greatly improved returns for investors and impressive cash flows.

Couche-Tard has funneled these higher cash flows into additional acquisitions, share buybacks, and dividends over the years. However, it appears that with a lack of deals available at the right price, Couche-Tard is going to focus more on organic growth from here.

For long-term investors looking at Couche-Tard’s track record of growth, that’s not a bad thing.

Manulife

Manulife is one of my top picks in the insurance industry for a number of reasons.

From a growth perspective, Manulife’s exposure to China is something I view as a key driver. The company recently announced that it will be taking over a higher percentage of its joint partnership in Asia. I think this is simply a growth lever that’s too juicy to ignore for long-term investors.

Additionally, the company’s fundamentals are excellent. Manulife provides investors with a solid balance sheet and an excellent track record of managing risk well. This has allowed Manulife to pay out a sector-beating dividend yield of 4.5%. For long-term investors, these fundamentals are hard to find in today’s market. Manulife is certainly a company that deserves a look.

Killam Apartment REIT

Killam is one of the top REITs on my watch list right now. This REIT focuses on developing residential and mixed-use properties across Canada. In particular, Killam is focused on Atlantic Canada, a region I view as underserved and holding excellent value.

In addition to holding a portfolio of real estate that’s well-located, Killam’s positioning couldn’t have been stronger through the pandemic. Folks need a place to live, and paying rent is a higher priority than most other things. Additionally, generous government support programs have improved Killam’s outlook to a degree I didn’t think was possible initially.

Moving past the pandemic, Killam is a company providing investors with meaningful income and capital appreciation potential. Indeed, this is a slow-and-steady stock I can see providing investors with maybe 10% a year over the long term.  That’s certainly not bad and makes for an intriguing opportunity for those looking for long-term value.

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 stocks mentioned in this article. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC and Killam Apartment REIT.

More on Dividend Stocks

TELECOM TOWERS
Dividend Stocks

If I Could Only Buy 1 Stock Before 2023, This Would be it!

If you could buy 1 stock before 2023, what would it be? Here’s the stock I’m considering, and I think…

Read more »

Beautiful holiday decorated background with christmas gift boxes ,fir. christmas holiday concept
Dividend Stocks

3 Dividend Stocks to Help Offset Holiday Spending

The holidays are here, and so is the seasonal spending. Offset some of those costs by putting your investment cash…

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

The 3 Passive-Income Stocks I’m Buying Next and Never Selling

These passive-income stocks have a proven track record of growth and a solid sector that will guarantee income for decades.

Read more »

oil and gas pipeline
Dividend Stocks

Enbridge Stock Rose More Than 4.5% in November: Is it a Buy Today?

Enbridge is having a good year. Are more gains on the way for the stock?

Read more »

worry concern
Dividend Stocks

3 Budget Mistakes Almost Everyone Makes

Leave these budget mistakes in 2022 and enter 2023 with more cash on hand and a better way of spending.

Read more »

Target. Stand out from the crowd
Dividend Stocks

Got $1,000? Buy These Up-and-Coming Stocks Before They Take Off

These growth stocks beat the long-term market returns and could continue delivering above-average growth in the coming years.

Read more »

Canadian Dollars
Dividend Stocks

Lazy Income: Earn $550 Per Month in 2023

Lazy income investors looking to establish or grow a monthly income stream should consider these options to bring in $555…

Read more »

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance
Dividend Stocks

Got $2,500? 2 Top Stocks That You Can Buy and Hold for a Lifetime

The market is full of opportunities, including these two stocks you can buy and hold forever.

Read more »