Here are 4 TSX Stocks That Look Like Great Buys for Value Investors

Four TSX stocks with strong fundamentals but underperforming in 2023 are great buys for value investors.

| More on:
value for money

Image source: Getty Images

These four TSX stocks are fundamentally stable, but because of heightened volatility, they aren’t keeping pace with the broader market thus far in 2023. RB Global Inc. (TSX:RBA), Canada Goose (TSX:GOOS), Northland Power (TSX:NPI), and TELUS International (TSX:TIXT) are underperformers year to date but look like great buys for value investors.

New growth platform

Ritchie Bros. Auctioneers, a leading auctioneer of commercial assets and vehicles, changed its corporate name to RB Global following its successful acquisition of U.S. auto retailer IAA. Its CEO, Ann Fandozzi, said, “The RB Global name signifies the transformation of our business into a premier global marketplace and more closely aligns with our strategy.”

According to Fandozzi, the $13.3 billion global asset management and disposition firm has been working to create a new growth platform that extends beyond auctions. She believes the IAA integration and collaborative platforms reinforce RBA’s compelling value-creation opportunities.

In Q1 2023, total revenue and gross transaction value (GTV) rose 30% and 32% to US$512.4 million and US$1.9 billion, respectively, versus Q1 2022. Its CFO, Eric Jacobs, said, “We remain confident in our ability to build on our combined momentum to deliver profitable growth as we integrate our businesses.” At $73.04 (-4.97% year to date), RBA pays a 1.98% dividend.

Brand strength

Canada Goose’s impressive Q4 and full-year fiscal 2023 financial results make it a strong buy. The $2.3 billion luxury apparel manufacturer also expects a stronger growth outlook in fiscal 2024 revenue and profitability metrics. The current share price is $21.80 (-9.47% year to date).

In the 12 months that ended April 2, 2023, revenue climbed 10.8% to $1.2 billion year over year. However, net income declined 27.1% to $68.9 million. Nevertheless, its Chairman and CEO, Dani Reiss, said Canada Goose would continue to build brand strength to generate profitable growth sustainable over the long term.

Clean and green

Canada’s first independent power producer with clean and green global power infrastructure assets is a no-brainer buy. Dividend-payer Northland Power is a steal at $29.76 per share (-18.9% year to date). You can buy on weakness and partake in the 4.03% dividend yield.

The $7.5 billion company produces electricity from clean-burning natural gas and renewable resources (solar and wind). Besides North America, it also operates in Latin America, Asia, and Europe. According to management, NPI is an energy transition growth story. Its capacity will grow from 3 gigawatts (GW) in 2023 to 12 GW by 2030.

Based on market analysts’ buy ratings and price forecasts, NPI’s return potential in 12 months is between 40.1% and 51.2%.

Solid revenue growth

TIXT deserves serious consideration due to its impressive US$686 million revenue in Q1 2023, a 14.5% jump from Q1 2022, notwithstanding macroeconomic challenges. The stock trades at a deep discount at $21.56 (-19.34% year to date).  Market analysts have a 12-month average price target of $37.17, a 72.4% upside potential.

The $5.9 billion digital customer experience innovator has solid backing in TELUS Corp., one of Canada’s dominant telecom firms. With the acquisition of a full-service digital product provider (Willow Tree), TIXT expects revenue growth between 20% and 23% in 2023.

Shout out to bargain hunters

Bargain hunters can exploit the elevated market volatility by accumulating shares of any of the four value stocks in focus.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends TELUS and Telus International. The Motley Fool has a disclosure policy.

More on Dividend Stocks

growing plant shoots on stacked coins
Dividend Stocks

Here Are My Top 5 Dividend Aristocrats to Buy Right Now

Now is the time to buy these top five dividend aristocrats at their two-year low before they recover to 2021…

Read more »

edit Real Estate Investment Trust REIT on double exsposure business background.
Dividend Stocks

Is NorthWest REIT Stock the Best High-Yield Dividend for You?

NorthWest REIT (TSX:NWH.UN) offers a substantial dividend, but exercise caution with this riskier stock.

Read more »

Dividend Stocks

Income Stocks: A Once-in-a-Decade Chance to Get Rich

These two income stocks are among the best on the TSX for those seeking consistent total returns over a long-term…

Read more »

dividends grow over time
Dividend Stocks

3 Top Royalty Stocks With Dividend Yields of up to 9%

When it comes to secured dividends, these three are top notch. Each offers exposure to royalties through franchising and ultra-high…

Read more »

Golden crown on a red velvet background
Dividend Stocks

This 8 Percent Dividend King Pays Out Every Month

Canoe EIT Income Fund (TSX:EIT.UN) is a staple for monthly income investors.

Read more »

sad concerned deep in thought
Dividend Stocks

Should You Buy Fortis or TC Energy Today?

These stocks have great track records of dividend growth.

Read more »

Dice engraved with the words buy and sell
Dividend Stocks

A&W Stock: Buy, Sell, or Hold?

Shares of A&W (TSX:AW.UN) stock popped by 20% after a major corporate restructuring announcement investors love.

Read more »

Payday ringed on a calendar
Dividend Stocks

3 Monthly Paying Dividend Stocks With Handsome 7% Dividend Yields

Given their healthy cash flows and high yields, I am bullish on these three monthly-paying dividend stocks.

Read more »