The economy’s resilience, easing of inflation, interest rate cuts, and investors’ optimism have led to a rally in several Canadian stocks. Despite bullish sentiments, a few fundamentally sound stocks with solid growth potential are still trading dirt cheap, providing an excellent buying opportunity for investors with a long-term outlook.
Meanwhile, investors can maximize their returns by investing in stocks via the Tax-Free Savings Account (TFSA). Within a TFSA, capital gains, dividends, and interest income are tax-free, boosting overall returns, especially in the long term.
Against this backdrop, let’s explore two dirt-cheap Canadian stocks worth buying and forgetting for the long term – ideally for at least 15 years within a TFSA. Note that the TFSA contribution limit for this year is $7,000.
TFSA stock #1
TFSA investors looking for dirt-cheap stocks could add shares of Lightspeed Commerce (TSX: LSPD). This Canadian technology company’s stock has experienced a significant correction, primarily due to broader economic challenges and the slowdown in e-commerce demand following the COVID-19 pandemic.
Nonetheless, Lightspeed’s fundamentals remain intact. Moreover, through its comprehensive suite of digital payment and omnichannel commerce solutions, it is well-positioned to benefit from the ongoing shift towards multi-channel selling models.
It’s worth noting that despite macro headwinds, the momentum in Lightspeed’s business has sustained. The company continues to grow its revenue at a healthy pace, reporting impressive 27% growth in the first quarter of fiscal 2025. The increased adoption of its financial products and higher payment penetration will help Lightspeed continue delivering strong sales in the years ahead.
Further, Lightspeed is steadily moving towards sustainable profitability. Over the past few quarters, it has consistently improved its financial performance and reduced losses, signalling a disciplined approach to cost management.
Lightspeed’s focus on revenue growth, cost control, and improving average revenue per user (ARPU) is expected to drive profitable growth. Moreover, Lightspeed’s strategic acquisitions are expanding its customer base, supporting product development, and strengthening its competitive positioning.
The sell-off in Lightspeed stock has driven its valuation lower. It trades at a forward enterprise value-to-sales (EV/Sales) multiple of 1.3, significantly lower than its historical average. This makes the stock highly attractive from a valuation perspective, offering a compelling opportunity for TFSA investors to buy at a multi-year low.
TFSA stock #2
WELL Health Technologies (TSX: WELL) is another fundamentally strong, dirt-cheap stock. Shares of Canada’s leading digital healthcare company are trading at a next 12-month enterprise value-to-sales (EV/sales) multiple of 1.5, which is near an all-time low.
While WELL Health stock is dirt cheap, the company consistently grows its revenue and earnings. The combination of solid growth and low valuation makes it a compelling investment. Further, WELL Health’s business is poised to benefit from higher omnichannel patient visits.
In the future, the largest owner-operator of outpatient medical clinics will also benefit from its acquisition strategy. This will expand its scale further and accelerate its revenue growth.
Moreover, WELL Health’s investment in artificial intelligence (AI) technology to develop innovative clinical products will likely improve healthcare services and drive future growth. Furthermore, the healthtech’s efforts to optimize its operations, increase its cash flows, reduce debt, and minimize share dilution will likely boost its share price.
