2 Grossly Undervalued TSX Stocks to Buy Today

Pembina Pipeline stock and Scotiabank stock are two undervalued TSX stocks that offer massive upside potential to investors today.

| More on:
edit Sale sign, value, discount

Image source: Getty Images

The Canadian stock market has been on a tear since recovering from the pandemic-fueled sell-off frenzy in February and March 2020. Barring some recent volatility since early September 2021, the S&P/TSX Composite Index has been rising consistently to new all-time highs. At writing, the Canadian benchmark index is up by 16.74% year to date.

In a market that seems to be climbing consistently, surprisingly, a few TSX stocks appear to have attractive valuations. Today, I will discuss two grossly undervalued stocks that you should keep a close eye on right now. Investing in the companies today could set you up for substantial wealth growth through the significant upside these companies have to offer.


While considering a Canadian Big Six bank as a value stock might not make sense, the Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is certainly an asset you can consider for that purpose. The Canadian bank boasts an expansive presence in the Latin American Pacific Alliance countries, namely Peru, Mexico, Columbia, and Chile.

Experts predict that the economy in these four countries will grow at a faster rate than G7 countries. While the onset of COVID-19 and its economic fallout might have caused a considerable delay on that front, the hopes of moving into a post-pandemic era are becoming more apparent.

At writing, Scotiabank stock is trading for $78.09 per share and is up by 15.31% year to date. The Canadian banking stock boasts a juicy 4.61% dividend yield. While it would be a worthwhile investment due to its juicy dividend yield alone, Scotiabank stock also presents significant upside potential if you can buy the stock before it starts its upward movement on the stock market.

Pembina Pipeline

Pembina Pipeline (TSX:PPL)(NYSE:PBA) stock is trading for far lower valuations than its peers, making it an attractively priced stock that could offer you significant upside potential in the coming years. The Canadian pipeline infrastructure company has strong growth prospects that could propel its share prices to higher levels as the energy demand recovery continues.

Higher demand for oil and gas implies that the volume of commodities that the company will be transporting will rise. With the combination of cost-saving measures and rising commodity prices, Pembina Pipeline could massively increase its profit margins and generate more substantial cash flows that could fuel its growth.

At writing, the stock is trading for $39.80 per share and is up by over 30% year to date. The stock boasts a juicy 6.33% dividend yield. Between the attractive dividend yield and upside potential, Pembina Pipeline stock could be an excellent addition to your portfolio.

Foolish takeaway

The recent-most market correction was not a significant downturn. After a sharp 2.61% dip in the five days between September 15 and September 20, the S&P/TSX Composite Index is back on an upward trend. The slight volatility might have worried many investors about what the immediate future holds.

However, investors seeking stocks with the potential to deliver stellar long-term returns should be looking at it as an opportunity to invest in high-quality companies at a discount.

Scotiabank stock and Pembina Pipeline stock could be excellent additions to your portfolio for this purpose.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA and PEMBINA PIPELINE CORPORATION.

More on Dividend Stocks

edit Person using calculator next to charts and graphs
Dividend Stocks

Better Buy: Fortis Stock vs Enbridge

Fortis stock and Enbridge are top dividend stocks on the TSX today. Which stock is better buy for safe dividend…

Read more »

Canadian Dollars
Dividend Stocks

How to Make $1,500 in Passive Income 4 Times a Year

Blue-chip TSX stocks such as Enbridge can enable investors to create game-changing wealth over the long term.

Read more »

Dividend Stocks

TFSA: How to Easily Turn $10,000 Into $500/Year of Passive Income

You don't need to be a stock market expert to turn $10,000 into a $500 of tax-free passive income. Here's…

Read more »

protect, safe, trust
Dividend Stocks

Worried About a Recession? 2 TSX Blue-Chip Stocks to Protect Your Capital

If you fear a recession coming on soon, here are two blue-chip Canadian stocks to add to your portfolio for…

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

New TFSA Investors: 2 Top TSX Stock to Create a Self-Directed Retirement Fund

Top TSX dividend stocks are now on sale for new TFSA investors.

Read more »

money while you sleep
Dividend Stocks

Worried About the Market? 2 Dividend Stocks That Let You Sleep at Night

Here's why Restaurant Brands (TSX:QSR) and Enbridge (TSX:ENB) are two top dividend stocks to buy in this uncertain market right…

Read more »

money cash dividends
Dividend Stocks

How 1 Absurdly Cheap Stock Can Generate $100 in Monthly Passive Income

You can generate $100 or more in monthly passive income from one high-yield stock trading at an absurdly cheap price…

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

How I’d Invest $1000 in February to Make Easy Passive Income

Looking to earn some extra passive income in February but don't have much cash? Build an easy portfolio with these…

Read more »