The Underperformers: Canadian Stocks That Missed the Mark in 2024

These Canadian underperformers have solid fundamentals and could rebound significantly in the coming years.

| More on:
a person watches a downward arrow crash through the floor

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Canadian benchmark index has delivered impressive gains of over 19% this year, reflecting strong performance across multiple sectors. However, several TSX stocks with fundamentally strong businesses have underperformed and eroded investors’ wealth. Let’s look at a few stocks that missed the mark in 2024 and assess whether they present a value opportunity for investors.

BCE stock

BCE (TSX:BCE), one of Canada’s top telecommunications companies, has had a tough year, with its stock plummeting over 31% in 2024. The steep decline reflects mounting challenges, including intense competition, shrinking margins, and the impact of economic pressures on consumers’ spending.

Adding to investor concerns, BCE recently announced that its annual dividend will remain unchanged at $3.99 per share through 2025. While this move was strategic to boost its liquidity and financial position, it disappointed investors accustomed to steady dividend increases, further pressuring the stock.

Created with Highcharts 11.4.3Bce PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Despite the near-term setbacks, BCE’s fundamentals remain solid. The pause in dividend growth comes after BCE’s acquisition of Ziply Fiber, which will expand its footprint in the U.S. fibre market. While the move didn’t sit well with investors, it positions BCE for long-term growth by diversifying its revenue streams and enhancing its scale.

Given the decline in its share price, BCE offers an exceptionally high yield of over 12%. While such a high yield seems unsustainable, BCE’s focus on cost optimization and growing its subscriber base profitably could support future earnings growth, potentially paving the way for dividend increases down the line.

Further, BCE will likely benefit from ongoing investments in its fibre network and 5G services. These initiatives are expected to attract more subscribers and drive revenue growth. Additionally, the company is capitalizing on emerging opportunities in digital advertising, cloud computing, and cybersecurity—areas poised for significant growth.

While BCE faces short-term challenges, its focus on driving profitable growth, revenue diversification, and investments in network infrastructure augurs well for long-term growth.

Lightspeed stock

Lightspeed (TSX:LSPD) is another top TSX stock that missed the mark in 2024. Shares of this cloud-based commerce platform provider are down about 19%, significantly underperforming the broader markets due to macro uncertainty and concerns over a potential slowdown in consumer spending.

Despite challenges, this tech company is consistently growing its gross payment volumes and organic revenue at a solid pace. The company is well-positioned to capitalize on the ongoing shift toward multi-channel sales platforms, a trend expected to sustain momentum in the coming years. While the stock is undervalued, Lightspeed’s focus on delivering sustainable earnings makes it a compelling long-term investment.

Created with Highcharts 11.4.3Lightspeed Commerce PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The company’s focus on high gross transaction volume customers is another growth catalyst that will likely drive its revenue per user and support margins. These customers use multiple modules within the platform, which enhances Lightspeed’s customer retention rate and drives higher revenue per user and overall margins. This strategy strengthens Lightspeed’s business model, making it more resilient to market fluctuations.

Additionally, Lightspeed’s strategic acquisitions are poised to drive further growth. These acquisitions will expand Lightspeed’s customer base and increase its global footprint.

In conclusion, while Lightspeed’s recent stock performance has been disappointing, its solid growth prospects, focus on high-value customers, and low current valuation position it as a promising long-term investment.

Should you invest $1,000 in Alphabet right now?

Before you buy stock in Alphabet, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Alphabet wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Investing

Stocks for Beginners

Dip Buyers Could Win Big: The Best Canadian Stocks to Buy Now

These two growth stocks have taken hits recently, but their fundamentals remain strong, and their growth prospects are intact.

Read more »

A bull and bear face off.
Stock Market

Bear Market Bargains Emerge as Recession Stocks Return

If you want a deal, then go to the best stocks during a recession market dip.

Read more »

Canadian Red maple leaves seamless wallpaper pattern
Dividend Stocks

5 Canadian Dividend Stocks to Buy and Hold for the Next 20 Years

These Canadian stocks have paid dividends for decades, making them reliable investments to generate regular passive income.

Read more »

An investor uses a tablet
Stocks for Beginners

The Smartest Canadian Stock to Buy With $250 Right Now

Are you looking for the smartest Canadian stock to buy right now? Consider this gem and avoid market volatility.

Read more »

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

Electricity transmission towers with orange glowing wires against night sky
Investing

Fortis Just Might Be the Best Canadian Dividend Stock to Buy in April

Let's dive into a few reasons why Canadian utility giant Fortis (TSX:FTS) still looks like a screaming buy heading into…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

a man relaxes with his feet on a pile of books
Investing

Got $7,000? How I’d Spread It Across 5 Blue-Chip Stocks for an Investing Foundation

Spreading $7,000 across these five blue-chip stocks provides a solid foundation for long-term financial success.

Read more »