3 Undervalued Canadian Stocks to Buy as Interest Rates Decline

These three top Canadian stocks are trading cheaply and can benefit from lower interest rates, making them some of the best to buy now.

| More on:
A worker uses a double monitor computer screen in an office.

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

With interest rates declining in Canada and the United States, the investment landscape continues to shift, opening up opportunities for long-term investors. It’s not uncommon to see lower borrowing costs drive growth across various sectors, making now an excellent time to evaluate undervalued Canadian stocks.

The key is to find high-quality companies that are trading below their intrinsic value. Whether these stocks are poised for recovery, future growth, or both, they can help you take advantage of the improving economic environment as interest rates continue to decline.

So, with that in mind, here are three top Canadian stocks to buy now that are undervalued and ready to benefit as the market environment improves.

A top Canadian gold stock to buy while it’s ultra-cheap

In the precious metals space, B2Gold (TSX:BTO) stands out as one of the most undervalued Canadian stocks you can buy today.

Created with Highcharts 11.4.3B2Gold PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

B2Gold is an ideal investment due to its operations of high-quality, low-cost mines in regions like Mali, Namibia, and the Philippines, generating substantial free cash flow even during times of economic uncertainty.

Furthermore, as interest rates decline, gold prices typically strengthen, which is something we’ve already begun to see in 2024, making B2Gold an attractive investment heading into 2025.

In addition, the company’s robust financial position, with no net debt and significant cash reserves, further supports its ability to weather market volatility and capitalize on rising gold prices.

Therefore, while B2Gold trades cheaply as a result of some temporary strikes at its mines, it’s certainly one of the best Canadian stocks to buy now.

Plus, not only can you buy B2Gold at a significant discount today, but the stock also pays one of the best dividends in the sector, with its current dividend yield sitting at more than 6.4%.

Therefore, if you’re looking for top Canadian stocks to buy now before interest rates get any lower, not only is B2Gold cheap, but it can also help generate significant passive income for your portfolio.

A residential REIT set to benefit from lower interest rates

In addition to gold stocks, which can see a boost from lower interest rates, real estate could also see a significant boom as rates decline.

There are many high-quality Canadian real estate investment trusts (REITs) trading undervalued, but one of the cheapest and best Canadian stocks to buy now has to be InterRent REIT (TSX:IIP.UN).

Declining interest rates are advantageous for real estate stocks like InterRent since lower borrowing costs reduce financing expenses, allowing the company to expand its portfolio more efficiently and improve its profitability.

Additionally, demand for rental housing remains strong across the country, particularly in urban areas where housing affordability challenges persist.

Therefore, as interest rates continue to fall, and with InterRent still trading well off its all-time high, it’s one of the best Canadian stocks to buy now.

Not only does it trade at a forward price-to-funds-from-operations (P/FFO) ratio of just 15.5 times today, much lower than its five-year average of 24.6 times, but its dividend yield has also risen significantly to just shy of 4%, well above its five-year average forward yield of just 2.6%.

Therefore, while this high-potential Canadian stock trades so cheaply, it’s one of the best stocks to buy now.

A top Canadian growth stock to buy now

Finally, in the healthcare sector, WELL Health Technologies (TSX:WELL) is one of the most promising Canadian stocks to buy now.

WELL operates an impressive portfolio of digital health solutions, telehealth services, and healthcare clinics, with it being the largest owner/operator of outpatient medical clinics in Canada.

In just the last few years, it’s grown rapidly both organically and by acquisition, which is what’s led to the impressive jump in both its revenue and profitability.

Furthermore, as interest rates decline, WELL will benefit from cheaper capital, making it easier to fund new acquisitions. Lower rates should also improve market sentiment, which can drive up its share price. Finally, cheaper capital will also help other companies ramp up their own acquisitions, making it easier for WELL to sell off some of its assets and unlock shareholder value.

Therefore, while one of the best Canadian growth stocks continues to trade below its fair value, it’s easily one of the best investments to buy now.

Should you invest $1,000 in B2gold Corp. right now?

Before you buy stock in B2gold Corp., 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 B2gold Corp. 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 Daniel Da Costa has positions in B2Gold and Well Health Technologies. The Motley Fool recommends B2Gold. 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

hand stacks coins
Dividend Stocks

How I’d Invest $20,000 in Canadian Stocks for Lasting Generational Wealth

Long-term investors willing to be patient with their money should have these three TSX stocks to build lasting wealth.

Read more »

four people hold happy emoji masks
Dividend Stocks

The Best Canadian Dividend Stocks to Buy in April 2025

Canadian dividend stocks are some of the best options out there, and these few look like some of the best.

Read more »

data analyze research
Investing

5 Canadian Value Stocks to Hold in Your TFSA for Patience-Rewarding Returns

These stocks all pay good dividends and currently look oversold.

Read more »

Canadian dollars are printed
Dividend Stocks

How I’d Use $10,000 to Transform My TFSA Into a Cash-Generating Machine

It may be grim out there, but there are plenty of sky-high dividend yields to choose from on the TSX…

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, April 10

In addition to the important U.S. consumer inflation report, TSX investors will also keep a close eye on developments related…

Read more »

Canada day banner background design of flag
Dividend Stocks

Top Canadian Stocks to Buy Right Now With $5,000

Looking for some safe, long-term stocks? These Canadian stocks are where you should look first.

Read more »

money goes up and down in balance
Investing

Where I’d Invest $5,000 in 5 Cheap Canadian Stocks for Value and Growth

$5,000 can buy five cheap Canadian stocks offering both value and price appreciation in 2025.

Read more »

cloud computing
Investing

Got $5,000 to Invest? 3 Insurance Stocks to Buy and Hold Forever

Insurance stocks have been great long-term investments. Here are three top stocks to add if the market pulls back.

Read more »