The quest to find the best value stocks is always on. Indeed, even though valuations are sky-high, there’s a reason why many investors continue to remain bullish. However, finding the best the TSX has to offer is a daunting task.
To make the search easier, I’ll be discussing three of my top picks on the TSX that I think are worth considering right now.
Top value stocks: Tourmaline Oil
Investors looking to play the energy space may want to consider Tourmaline Oil (TSX:TOU). This company stands out from a valuation perspective as an enticing pick right now. Indeed, the company’s valuation at only eight times earnings is certainly attractive to long-term investors.
Tourmaline’s growth profile has been staggering, to say the least, with commodity prices surging. Tourmaline stock has skyrocketed over 150% year to date. Accordingly, it has been an excellent option for investors who have sought out high-growth opportunities in the energy sector.
At the time of writing, Tourmaline offers a dividend yield of 1.5%, which may not be enticing to many investors. However, this company does declare special dividends occasionally, depending upon its profits. This indicates in that during unfavourable times, it doesn’t need to pay out dividends. This sort of flexibility is something I think is attractive to those bullish on where commodity prices are headed.
West Fraser Timber
Another commodities player, West Fraser Timber (TSX:WFG)(NYSE:WFG) is a lumber producer that’s been on my radar for quite some time. Indeed, this stock has enjoyed a nice run, surging over 125% over the past five years. That said, I believe there could be more room for growth with some key catalysts in place.
A few months back, West Fraser completed the takeover of Norbord, which grew the combined company’s overall market share. Furthermore, the business model of West Fraser became much more enticing for investors who are optimistic regarding long-term growth in the lumber sector.
Indeed, lumber prices have been subject to high volatility, rising during the summer season before plummeting recently. That said, following this acquisition, the unit economics of West Fraser appears to be quite impressive.
At the time of writing, this stock has a valuation multiple of roughly three times earnings, which is extremely attractive for value investors at these levels. Accordingly, this is an intriguing option for value investors right now.
When it comes to values stocks on the TSX, Alimentation Couche-Tard (TSX:ATD.B) has been one of my top picks for quite some time. At the time of writing, shares of this company trade at 15 times earnings, which is quite attractive from the valuation perspective. This intriguing valuation of the company is primarily a result of the pandemic-related restrictions.
That said, with vehicles coming back to the roads again, there is plenty of optimism surrounding this gas and convenience store operator. I believe that the company will report higher earnings in the forthcoming quarters. Indeed, it appears that Couche-Tard stock finally has a bit of momentum. This is why it the stock looks even more enticing at these levels.
Investors must also keep in mind that this company operates in global markets, including Denmark, Russia, and Sweden. Furthermore, it has now expanded its operations into Asian markets as well.