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

Given their solid underlying businesses and healthy growth prospects, these three value stocks could deliver superior returns over the next three years.

| More on:
Value for money

Image source: Getty Images

Value stocks are those that are trading at lower share prices compared to what their performances indicate. Investors can utilize the inefficiency in the market to reap superior returns. Meanwhile, earlier this week, Statistics Canada reported that Canada’s inflation rose 2.9% last month, lower than analysts’ expectation of 3.3%. With signs of inflation slowing down, investors believe that central banks will soon adopt monetary easing initiatives.

Amid improving investor sentiments, I believe the following three value stocks would be excellent buys.


The telecommunication sector is a capital-intensive business. So, rising interest rates have put pressure on the industry over the last 12 months, with BCE (TSX:BCE) losing around 22% of its stock value compared to its 52-week high. The decision from the federal government and CTRC (Canadian Radio-television and Telecommunications Commission) to allow independent players to offer their services utilizing fibre networks of large telecoms also weighed on the company’s stock price. The selloff has dragged its valuation down, with its NTM (next-12-month) price-to-sales and NTM price-to-earnings multiples at 1.9 and 16.8, respectively.

Meanwhile, I believe the correction appears to be overdone, as the growing demand for telecommunication services amid digitization has created a long-term growth potential for the company. The Montreal-based telco has been strengthening its 5G and broadband infrastructure to expand its coverage across the country. Its expanding customer base and growing ARPU (average revenue per user) could boost its financials in the coming years. Also, higher initial capital investment and the need for regulatory approvals have created a natural barrier for new entrants, thus allowing its existing player to maintain their market share. BCE has raised its quarterly dividend to $0.9975/share, with its forward yield at 7.79%.

Lightspeed Commerce

Lightspeed Commerce (TSX:LSPD) has been under pressure since reporting its third-quarter performance for fiscal 2024 on February 8, losing around 32% of its stock value. Although it reported an impressive performance during the quarter, the management’s cautious outlook due to the uncertain macro environment dragged its stock price down. During the quarter, the company’s revenue grew by 27%. Also, its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) stood at $3.6 million, a substantial improvement from a loss of $5.4 million in the previous year’s quarter.

Meanwhile, the company’s management is cautious in the near term due to the uncertain macro environment and the adoption rate of its Unified Payments in international markets. Despite the near-term volatility, its fundamentals remain strong amid a growing customer base, a customer shift towards higher GTV locations, and improving profitability. Further, innovative product development, expansion to new markets, and growing addressable markets could continue to drive its financials in the coming years.

However, the Montreal-based commerce solutions provider trades at an attractive valuation amid the recent selloff. It currently trades at a price-to-book multiple of 0.8 and an NTM price-to-sales multiple of 1.9, making it an attractive buy.

WELL Health Technologies

WELL Health Technologies (TSX:WELL) is my final pick. The digital healthcare company has lost over 37% of its stock value compared to its 52-week high. The increase in net losses in the previously announced third-quarter earnings appears to have made investors skeptical, dragging its stock price down. Meanwhile, the company has taken several initiatives, such as streamlining and cost-optimizing its operations, to enhance efficiency and boost its cash flows.

Besides, the digitization of clinical procedures and growing demand for virtual healthcare services have increased the demand for the company’s services. The company is developing artificial intelligence-powered tools and new products that could strengthen its position and boost its financials in the coming quarters. The company’s management hopes to post $900 million in revenue this year. Given its growth prospects and a cheaper NTM price-to-sales multiple of one, I believe WELL Health Technologies will deliver superior returns over the next three years.

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

Growing plant shoots on coins

This Growth Stock Has Market-Beating Potential

Here's why Restaurant Brands (TSX:QSR) remains the top TSX growth stock long-term investors should consider for big gains.

Read more »

protect, safe, trust
Dividend Stocks

How to Earn Safe Dividends With Just $10,000

Earn reliable income with relatively safe stocks like Fortis.

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

2 Dividend Stocks to Beat Inflation

These two TSX dividend stocks can be excellent holdings to beat inflation, even as inflation cools down.

Read more »

dividends grow over time
Dividend Stocks

TFSA: Invest $20,000 and Get $860/Year of Predictable Passive Income

Looking for safe passive income that will grow and build wealth inside your TFSA. Check out this four-stock portfolio of…

Read more »

Increasing yield
Dividend Stocks

3 Overlooked High-Yielding Dividend Stocks to Buy Right Now

These three dividend stocks are excellent buys, given their discounted prices and high yields.

Read more »

Dad and son having fun outdoor. Healthy living concept
Dividend Stocks

Married? Have Kids? Grab These 5 CRA Tax Breaks

You can transfer dividend income from stocks like Suncor Energy Inc (TSX:SU) to your spouse and enjoy tax savings that…

Read more »

You Should Know This
Dividend Stocks

Why Claiming CPP at 65 Could Be a Mistake

The CPP pegs the start retirement age at 65, but it's not necessarily the ideal option to start pension payments.

Read more »

Oil pumps against sunset
Energy Stocks

2 Absurdly Cheap Energy Stocks I’d Buy in April 2024

Here's why undervalued TSX energy stocks such as Secure Energy Services should be part of equity portfolio in 2024.

Read more »