Canadian stocks have had an exceptional year in 2024. The TSX Index is up 20% in the year. While it might be harder to find investment opportunities that are “cheap,” there are still opportunities if you are vigilant. Here are five attractive undervalued stocks that contrarians can buy with $5,000 right now.
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A diversified services provider
Calian Group (TSX:CGY) has been steadily delivering on its plan to hit $1 billion of revenues. However, so far, the market has not rewarded it accordingly.
In fiscal 2024, Calian grew revenues by 13% to $747 million. Earnings before interest, tax, depreciation, and amortization (EBITDA) rose by 30% to $86 million. Margins also improved nicely over the year.
Calian made several smart acquisitions that continue to diversify its earnings stream by sector and geography. Yet, its stock is down 18% in the year.
Fundamentals have improved, but its valuation has declined. This dynamic won’t last forever, and Calian is primed for a nice stock rebound.
An undervalued real estate stock
Another stock that is down and out is Minto Apartment REIT (TSX:MI.UN). Its stock is down 17% in the year. The company is likely a victim of tax loss selling at this point.
Yet, if you looked at the REIT’s fundamentals, things are not as bad as it appears. Year-to-date, it has grown cash flow per unit by 11%. It sold off several non-core assets, significantly paid down debt, and increased its distribution (for the seventh consecutive year).
The REIT trades at a 40%-plus discount to the private market value of its apartment property assets. It has a nice 3.5% dividend yield. This REIT could be an attractive value buy, especially if interest rates keep declining.
A top stock for dividends
Another stock that has recently pulled back is Pembina Pipeline (TSX:PPL). Its stock is down 9% in the past month. Trump’s tariff threats and a weaker-than-expected 2025 guidance are likely culprits for the share decline.
Yet, if it is income that you want, it is income that you will get with Pembina. The company has a very strong balance sheet, and it generates strong free cash flow.
The energy firm’s highly contracted stream of earnings widely protects its dividend. PPL yields 5.2% today. It looks attractive after the recent decline.
A solid blue chip
Another blue-chip stock that looks like a buy is Canadian Pacific Kansas City (TSX:CP). This 140-year-plus company has one of the most competitive rail networks in North America. It has the only line that spans across the continent.
Its stock has given up almost all its gains in 2024. Investors are worried about the Trump tariff regime. This near-term worry is a long-term opportunity for investors today.
CP has one of the highest projected growth rates amongst rail peers. It has a top management team, a great network, and a fast-improving balance sheet. If you aren’t worried about the Trump effect, now is the time to be opportunistic.
A growth story unfolding
If you want some growth in your portfolio, Topicus.com (TSXV:TOI) is one to consider adding. It is the little brother of Constellation Software.
The software juggernaut is consolidating the vertical market software sector in Europe. TOI stock is down 16% since its $140 per share peak in September. While its acquisition pace slowed in 2024, its balance sheet is strong, and it is generating strong free cash flow.
Topicus is primed to accelerate acquisitions next year. There are rumours that it is eyeing other markets, so that could also provide growth opportunities in the years to come.
