3 Incredibly Undervalued TSX Stocks to Buy Right Now

Here are three of the top undervalued stocks in Canada I’d recommend long-term investors take a hard look at right now.

| More on:
Hand writing Time for Action concept with red marker on transparent wipe board.

Image source: Getty Images

A variety of factors have led to the recent market surge we’ve seen of late. A global recovery has materialized, the likes of which many investors were bearish on last year. Accordingly, finding undervalued stocks in this market has become increasingly difficult, as stocks got bid up to impressive levels in recent months.

However, there’s always value in every market. In Canada, it appears there are perhaps more pockets of value than in other markets such as the United States. Fewer eyeballs mean more opportunity.

Accordingly, here are three of my top picks for value-conscious investors right now.

Top undervalued stocks: SmartCentres REIT

One of the top value picks I’ve been pounding the table on recently in the real estate sector is SmartCentres REIT (TSX:SRU.UN). This Canadian REIT is focused on providing investors with a world-class portfolio of retail-oriented properties. This REIT currently pays investors a dividend yield of 6.1% at the time of writing.

If that yield weren’t juicy enough to get investors’ attention, the company’s retail properties offer an advantage over other peers. More than half this company’s properties are anchored by Walmart, an absolute retail juggernaut. In fact, more than 25% of the trust’s income comes via its Walmart leases.

Thus, in an otherwise difficult retail sector to invest in, SmartCentres remains a top value pick I’d recommend investors consider right now.

Magna International

With a market capitalization of $28.6 billion, Magna International (TSX:MG)(NYSE:MGA) is a massive corporation in the Canadian car-making industry. The EV industry has become huge, amid increasing environmental concerns. And this company has gained from this interest.

Magna boasts an attractive global footprint spread across 28 countries on five continents. The total number of cars that rolled off the production line of this company is more than 3.7 million. As the third-biggest automotive parts supplier in this world, Magna also focuses on electrified powertrains.

The rise of the electric vehicle industry saw Magna International partner with many top makers in the industry. This, in turn, offers investors impressive potential to capitalize on the growing industry.

Alimentation Couche-Tard

Alimentation Couche-Tard (TSX:ATD.B) is an excellent long-term growth and value pick. This company owns and operates more than 14,000 convenience stores and gas stations globally. The company has grown rapidly through acquisitions for years now. This shows how incredible this business is. Besides all this growth, the business is quite defensive as well.

This is a giant Canadian stock with a market cap of over $50 billion. This makes it one of the biggest companies with the most favourable valuation out there. Trading at just 15 times earnings, investors are getting a tremendous amount of growth potential for a reasonable price.

Over the last 10 years, Couche-Tard shareholders have seen a compounded annual growth rate upwards of 26.75%, or a total return of 974%.

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. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC. The Motley Fool recommends Magna Int’l and Smart REIT.

More on Dividend Stocks

Dividend Stocks

Enbridge Stock: This Dividend Aristocrat Looks Like a Steal in 2023

Here are some key factors that make ENB a great Canadian dividend stock to buy on the dip in 2023.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

U.S. Debt Ceiling: Is It Safe to Invest Right Now?

The U.S. debt ceiling is in the headlines again. You can play it safe by investing long term in wonderful…

Read more »

analyze data
Dividend Stocks

How to Invest $20,000 to Make Ultra-Safe Passive Income

Got $20,000 to invest for passive income? These three stocks are perfect for earning ultra-safe passive income for the long…

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

For Passive Income: How to Turn $25,000 Into $158 Per Month

High-yield, monthly dividend stocks trading on the TSX such as Slate Grocery can help you earn a predictable stream of…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Canadian Dividend Stocks to Buy for Consistent Passive Income

These top dividend stocks have raised their distributions annually for more than two decades.

Read more »

Piggy bank next to a financial report
Dividend Stocks

Self-Directed RRSP: 2 Top Dividend Stocks to Buy in June 2023

These top TSX dividend stocks look cheap to buy today and offer attractive dividend yields.

Read more »

Dividend Stocks

Looking for Reliable Retirement Income? Consider These Dividend-paying Stocks

National Bank of Canada and another reliable income stock that could be a perfect fit for your retirement fund this…

Read more »

grow money, wealth build
Dividend Stocks

Are You Looking for High-Yield Investments? 3 TSX Stocks That Offer Excellent Payouts

These dividend stocks all offer solid payouts, as well as yields in the five to six percent range. So get…

Read more »