Last month, the equity markets were under pressure amid the indication by the Federal Reserve of slower monetary easing initiatives. The S&P/TSX Composite Index fell 3.6% in December. However, the Canadian equity markets have begun 2025 positively, with the benchmark index rising 1.1%. Amid improving investors’ sentiments, here are three value stocks that you can buy to reap superior returns.
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Savaria
Savaria (TSX: SIS) offers accessibility solutions to the physically challenged worldwide through its expanded manufacturing facilities and solid dealer network. The company has been under pressure over the last few months, with its stock price falling 16% from its October highs. Amid the pullback, the company’s valuation looks attractive, with its NTM (next 12 months) price-to-sales and price-to-earnings multiples at 1.6 and 18, respectively.
Meanwhile, the demand for accessibility solutions is rising amid the aging population and rising income levels, thus expanding the addressable market for Savaria. Given its wide range of product offerings, solid manufacturing capabilities, and global dealer network, the company could benefit from addressable market growth. Further, “Savaria One,” a multi-year initiative, focuses on new product development, expanding market share, boosting capacity and throughput, and improving supply chain efficiency.
Amid these growth initiatives, Savaria’s management projects its topline to reach $1 billion in 2025 while expanding its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) margin to 20%. Considering its growth prospects and cheaper valuation, I believe Savaria would be an excellent buy right now.
goeasy
Another value stock I am bullish on is goeasy (TSX: GSY), which offers leasing and lending services to subprime lenders. Although the alternative financial services company has witnessed healthy buying over the last few days, it still trades around 16% lower compared to its 52-week high. Besides, its valuation looks reasonable, with the company trading at nine times analysts’ projected earnings for the next four quarters.
Meanwhile, the monetary easing initiatives by the central bank could boost economic activities, thus driving credit demand. Given its comprehensive product range and solid distribution network, goeasy could benefit from the growth in credit demand. Further, the subprime lender has adopted next-gen credit models and tighter underwriting requirements, which could lower delinquencies and boost its profitability. Also, GSY has rewarded its shareholders by raising its dividends for 10 consecutive years and currently offers a healthy dividend yield of 2.7%.
WELL Health Technologies
Supported by its solid financials, continued acquisitions, and healthy growth prospects, WELL Health Technologies (TSX: WELL) delivered impressive returns of over 78% last year. Despite solid returns, it trades at a reasonable NTM price-to-sales multiple of 1.6. Moreover, the growing adoption of virtual healthcare services, digitization of clinical procedures, and increased usage of software solutions in the healthcare sector have created multi-year growth potential for WELL Health.
Further, the company is investing in artificial intelligence (AI) to develop innovative products to help healthcare professionals deliver positive patient outcomes. Also, it continues expanding its footprint through strategic acquisitions and has a solid pipeline of 17 signed LOIs (letters of intent) and definitive agreements. The digital healthcare company is also working on spinning out WELLSTAR, which offers a comprehensive suite of solutions that would meet the needs of healthcare providers. The spinoff provides investors an excellent opportunity to invest in a pure-play software-as-a-service (SaaS) technology company. Considering all these factors, I believe WELL Health would be an ideal buy now.
