3 Undervalued Canadian Stocks to Buy This Week

If you are looking for undervalued Canadian stocks to buy and hold for the long run, here are three of my top stock picks this week!

| More on:
Woman has an idea

Image source: Getty Images

The Canadian stock market has had a great year in 2021. This has led many market commentators to believe there could be some sort of pullback in the fall. They could be right. However, I find it is never best to try to time the market. No one can predict the future, and no one can know if stocks will stall or push forward.

I find the best way to invest is by consistently putting some extra savings into stocks of great-quality businesses. In the near term, these investments are sure to fluctuate. However, I plan to hold these businesses like a partner or an owner.

That often requires patience, commitment to my investment thesis (unless there is a material change), and a long-term mindset. I have found that over the long term, day-to-day market “noise” matters less and less as time rolls on. If you are not afraid to be a long-term business owner, here are three top undervalued Canadian stocks I would buy this week.

A top Canadian dividend stock

I like to have a few Canadian dividend stocks in my portfolio. Dividend income is a great way to offset short-term equity volatility. Even when the market is down, high-quality stocks still pay out attractive quarterly or monthly dividend returns. That is why I like TELUS (TSX:T)(NYSE:TU).

Over the past five years, TELUS has raised its dividend on average by 7.1%. While it yields 4.4% today, it actually raised its payout by 8.6% this year. The company has been leading the market in net customer additions. Likewise, it has rapidly been expanding its fibre optic network and 5G capacity.

The big differentiator is its fast-growing pipeline of technology vertical businesses. In Canada, TELUS is becoming a leader in virtual health and agri-tech. Not to mention, it just spun-off its exciting digital services business, TELUS International. The market has yet to fully value its share in these fast-growing businesses. As a result, I believe there is attractive capital upside and fairly certain dividend growth going forward.

A top value stock

Generally, e-commerce is not a word associated with Canadian value stocks. Yet, when it comes to Intertape Polymer Group (TSX:ITP), e-commerce is a huge part of its growth story. It is becoming a leading provider of tapes, wraps, and packaging materials across the world.

If you find yourself collecting more Amazon packages every week, chances are good they use Intertape’s water-activated tapes to seal them. Over the past few years, the company has rapidly expanded its product mix for the e-commerce industry. Consequently, it saw record results in 2020.

Just last week, it announced strong second-quarter results. Revenue and adjusted EBITDA increased year over year by 41% and 60%, respectively. Despite having an elevated growth profile, this Canadian stock is still cheaper than its peers. As a result, this stock is great buy today.

A top Canadian growth stock

Calian Group (TSX:CGY) is a Canadian stock that gives investors growth, value, and income. While it is not a household name, it provides mission-critical solutions for high-quality counterparties like the Canadian Armed Forces, NATO, and the European Space Agency.

I like this business, because it has four unique, diversified segments (healthcare, education, IT/cybersecurity, and advanced technology). This provides a unique hedge should any one segment slow or face challenges.

Fortunately, right now, every segment is growing rapidly, so that is hardly a worry. It just reported year-over-year growth in each segment that was between 15% and 65%!

Overall, in 2021, Calian is targeting revenue and adjusted EBITDA growth of +16% and +30%, respectively. This Canadian stock pays a 1.7% dividend and trades for only 17 times this year’s adjusted earnings. It still looks like an attractive buy 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.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Robin Brown owns shares of Amazon, Calian Group Ltd., INTERTAPE POLYMER, TELUS CORPORATION, and TELUS International (Cda) Inc. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends Calian Group Ltd., TELUS CORPORATION, and TELUS International (Cda) Inc. and recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon.

More on Stocks for Beginners

Target. Stand out from the crowd
Stocks for Beginners

2 No-Brainer Stocks to Buy With $7,000

Got some cash to fill up your TFSA? Here are two stocks that look like good buys on the recent…

Read more »

top TSX stocks to buy
Stocks for Beginners

3 Stocks That Can Help You to Get Richer in 2024

These three stocks have already proven their worth this year, but are set to continue climbing in 2024 and even…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Kinaxis: The AI Stock Investors Are Missing Out On

Kinaxis stock (TSX:KXS) is one AI stock you don't want to miss, with proven results and long-term contracts leading to…

Read more »

telehealth stocks
Tech Stocks

Forget Shopify Stock: 1 Tech Stock to Buy Instead

Shopify stock (TSX:SHOP) plunged by over 20% after earnings guidance for the second quarter came in lower, but this other…

Read more »

A golden egg in a nest
Dividend Stocks

How to Build a Monthly Passive-Income Portfolio in Retirement With Just $7,000

This monthly paying dividend stock is one of the best ways to create a passive income portfolio in retirement. It's…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Stocks for Beginners

3 Soaring Stocks You Can Buy Right Now Before They Surge Even Higher

These three soaring stocks have continued to climb in 2024 but have so much more to give investors moving forward.

Read more »

Economic Turbulence
Stocks for Beginners

Down but Far From Out: 3 TSX Stocks to Buy and Hold Forever

Here are some market leaders that are going through difficult times. They are stocks worth buying and holding.

Read more »

Car, EV, electric vehicle
Stocks for Beginners

The Ultimate EV Stock to Buy With $1,000 Right Now

If you're investing long-term in EV stocks, this company is already seeing massive growth and expects more to come in…

Read more »