3 Top Canadian Value Stocks in November 2023

Given their healthy growth prospects and cheap valuations, I am bullish on these three Canadian value stocks.

| More on:
Value for money

Image source: Getty Images

The Canadian equities are witnessing healthy buying this month amid signs of easing inflationary pressure and a pause by the Central banks on interest rate hikes. The Canadian benchmark index, the S&P/TSX Composite Index, is up 6.6% this month. Despite the recent increases, a few companies are still trading at a discount compared to their 52-week highs, while their valuations also look attractive.

Meanwhile, here are three such value stocks that you can buy now to earn superior returns.

WELL Health Technologies

WELL Health Technologies (TSX:WELL) reported an impressive third-quarter performance last week, with its revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to its shareholders growing by 40.2% and 13.2%, respectively. During the quarter, the company had 1.03 million patient visits and 1.58 million patient interactions.

Meanwhile, the company continues to develop and launch innovative products and make strategic acquisitions to drive growth. Last month, it introduced WELL AI Decision Support, which aids healthcare professionals in the early diagnosis of diseases. It also acquired Proack Security, which could enhance its capabilities in safeguarding sensitive information while providing robust security across healthcare and corporate networks.  With these growth initiatives and its continued solid underlying business, WELL Health projects its 2024 revenue to exceed $900 million.

Despite its continued solid performances and healthy growth, the company trades at a healthy NTM (next 12-month) price-to-earnings multiple of 13.7, making it an attractive buy.

Lightspeed Commerce

Second on my list is Lightspeed Commerce (TSX:LSPD), which also reported a solid second-quarter performance for fiscal 2024 this month. Its revenue grew 25% to $230.3 million, higher than its earlier guidance of $210-$215 million. The company’s customer base shifted towards higher GTV (gross transaction volume), supporting its financial growth. Its ARPU (average revenue per user) also rose 26% to $425.

Amid the top-line growth, the company posted a positive adjusted EBITDA for the first time. Its adjusted EBITDA came in at $0.2 million compared to an adjusted loss of $8.5 million in the previous year’s quarter. With its cash and cash equivalents at $761.5 million, it is well positioned to support its growth initiatives. Further, the company’s management is hopeful that its 2024 revenue could come between $890 million and $905 million. The midpoint of the guidance represents a 23% increase from the previous year. Besides, the company hopes to break even or deliver better adjusted EBITDA for the fiscal year.

Meanwhile, Lightspeed still trades at over 85% discount compared to its 2021 highs. Besides, its NTM price-to-sales and price-to-book multiples are at 2.5 and 1, respectively. Given its growing financials and cheaper valuation, I am bullish on Lightspeed.

Savaria

Another value stock I am bullish on would be Savaria (TSX:SIS), which offers accessibility solutions to physically challenged people. Earlier this month, it reported a healthy third-quarter performance, with its revenue growing by 4.3% amid organic growth of 4.1% and favourable currency translation. Meanwhile, the divestiture of the Norway operations offset some of the growth. Meanwhile, its gross margin improved by 2.7% to 34.5%, while its operating margins increased from 8.7% to 9.8%.

Amid top-line growth and expansion of its operating margins, the company’s adjusted net income grew 7.8% to $12.05 million. The company also generated an adjusted EBITDA of $33.6 million, representing an 8.3% increase from the previous year’s quarter.

Given its high backlog levels, cross-selling initiatives, and strong demand, the company’s management hopes to maintain organic growth across its accessibility and patient care segments. So, the management expects its revenue to grow 8-10% this fiscal year while its adjusted EBITDA margin would come at a healthy 16%. Further, Savaria’s management remains confident of achieving revenue of $1 billion in 2025. Meanwhile, the company’s NTM price-to-sales multiple stands at 1.1, making it an attractive buy. It also pays a monthly dividend of $0.0433/share, with its forward yield at 3.62%.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Lightspeed Commerce. The Motley Fool has a disclosure policy.

More on Investing

Retirement
Investing

Got $5,000? Buy and Hold These 3 Value Stocks for Years

Given their solid underlying businesses, healthy growth prospects, and attractive valuation, I am bullish on these three value stocks.

Read more »

money cash dividends
Stocks for Beginners

Got $1,000 to Invest in Stocks? Put It in This Index Fund

This low-cost beginner-friendly ETF is a great way to invest $1,000.

Read more »

Overhead shot of young adults using technology at a table
Tech Stocks

3 Cheap Tech Stocks to Buy Right Now

Given their long-term growth prospects and discounted stock prices, I am bullish on these tech stocks.

Read more »

money cash dividends
Dividend Stocks

Have $500? 2 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

Want some absurdly cheap stocks for your portfolio? Here are two options trading at a huge discount right now.

Read more »

Gas pipelines
Dividend Stocks

TFSA Passive Income: Is Enbridge Stock a Buy, Sell, or Hold?

Enbridge now offers a yield near 8%. Is the dividend safe?

Read more »

A worker uses the cloud for paperless work. tech
Tech Stocks

Wanna Beat the Market? Try These 2 Tech Stocks That Look Undervalued Today

Here's why undervalued TSX stocks such as Vitalhub can help you generate outsized gains in the next 12 months.

Read more »

Redwood trees stretch up to the sunlight.
Tech Stocks

These 3 Magnificent Stocks Keep Driving Higher

Constellation Software, Dollarama and another TSX stock have consistently generated positive investment returns. Here’s why they belong in your retirement…

Read more »

sale discount best price
Dividend Stocks

3 Stocks to Buy While They Are on Sale

Top TSX dividend stocks are trading at discounted prices.

Read more »