Looking for a deal? You’ve come to the right place. Canadian investors might believe that it can be tricky to find value stocks on the TSX today. Especially if you’re looking to park $5,000 into these stocks and keep the money there for years.
But if you’re looking for value stocks, it comes down to a few fundamentals. Value stocks tend to be companies that are undervalued relative to their intrinsic worth. They tend to offer low price-to-earnings (P/E) and price-to-book ratios (P/B), a high dividend yield, and strong balance sheet. So let’s find three value stocks that should fit right into this category.
GFL
First up we have GFL Environmental (TSX: GFL). This Canadian-based environmental services company specializes in waste management and environmental solutions. GFL stock provides a wide range of environmental services to residential, commercial, industrial, and municipal customers. Its services include waste collection, disposal, recycling, organics processing, soil remediation, liquid waste management, and infrastructure services such as soil and water treatment.
Acquisitions have been a key driver of GFL’s growth strategy. The company has a history of acquiring complementary businesses to expand its geographic footprint, service offerings, and customer base. What’s more, the company has demonstrated strong financial performance since its inception. The Revenues and earnings have steadily grown, reflecting its expanding customer base, diversified service portfolio, and operational efficiency.
Yet the stock currently trades at just 2 times earnings and 2.4 times book value. The dividend yield is lower at 0.17%, but higher than the five-year average of 0.15%. And with major growth in the last few years, it is certainly a value stock to consider.
TFII
Now I get it. TFI International (TSX: TFII) recently fell in share price after announcing more acquisitions. It seems investors want the company to hold onto their cash. But if we hope to see the company expand in the years to come, TFII stock is doing exactly the right thing.
The North American transportation and logistics company operates through various business segments, each specializing in different areas of transportation and logistics. And TFI International has a history of growth through strategic acquisitions. The company has acquired numerous transportation and logistics businesses over the years to expand its service offerings, enter new markets, and enhance its competitive position. These acquisitions have contributed to TFI International’s growth and diversification.
Meanwhile, shares of the value stock trade at just 24.4 times earnings as of writing, with a 1.13% dividend yield. The value stock is also up 21% in the last year alone, even after dropping from the recent news. And that could turn around soon with first quarter earnings just around the corner.
MEG Energy
Finally, we’ll finish off with value stock MEG Energy (TSX: MEG). Shares of the company have grown higher over the last year, and yet it continues to be one of the value stocks to consider. After all, the oil sands company operates within one of the largest oil sands deposits in the world.
MEG Energy has steadily increased its production capacity at the Christina Lake Project over the years. The company’s reserves consist primarily of bitumen resources located within the Athabasca oil sands region. MEG Energy continues to invest in the development of its reserves and optimization of production facilities to maximize efficiency and profitability.
So now, with shares trading at 16 times earnings and 1.9 times book value, it certainly looks like a deal. While it does not have a dividend, that may change as the company expands. For now, look forward to the growth you get from this value stock.
