Value stocks are companies that trade temporarily lower than their intrinsic value due to various external factors, such as broader market weakness. Investors with longer investment horizons should utilize these opportunities to accumulate these stocks and reap higher returns. Against this backdrop, let’s look at three top-value stocks I am bullish on.
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goeasy
goeasy (TSX: GSY) is one of my top picks due to consistent financial growth and healthy growth prospects. The Mississauga-based subprime lender has expanded its loan portfolio from $1 billion in August 2019 to over $4.6 billion as of December 31, 2024. Its expanded financial product offerings, solid omnichannel distribution model, increasing penetration in key geographic markets, and enhanced customer experiences have allowed the company to expand its loan portfolio and drive its financials.
Over the last five years, the company has grown in revenue at a 20.1% CAGR (compound annual growth rate), while its adjusted EPS (earnings per share) has increased at an annualized rate of 28.1%. Meanwhile, the company’s management projects the expansion of its loan portfolio to continue and reach $7.4–7.8 billion by the end of 2027. The midpoint of guidance represents an annualized growth rate of around 18% for the next three years. Amid the expansion, its topline could grow at an 11.4% CAGR while improving its operating margin to 43% in 2027. So, its growth prospects look healthy.
However, goeasy has been under pressure over the last few weeks and has lost over 22% of its stock value compared to its January high. Amid the correction, the company trades at 7.6 times analysts’ projected earnings for the next four quarters, which looks attractive given its healthy growth prospects.
Bank of Nova Scotia
Another value stock I am bullish on is the Bank of Nova Scotia (TSX: BNS), which offers various financial services in around 20 countries. Its resilient business model has delivered stable and predictable cash flows, allowing it to pay dividends uninterruptedly since 1833. Also, it has raised its dividends at an annualized rate of 5.2% for the last 10 years and currently offers a juicy forward dividend yield of 6.1%.
Meanwhile, the Toronto-based financial services company continues to strengthen its position in the high-growth North American market by acquiring a 14.9% stake in KeyCorp. Besides, it recently sold its banking operations in Colombia, Costa Rica, and Panama to Davivienda to improve efficiency. Its adjusted EPS grew 4.1% in the first quarter of fiscal 2025, which ended on January 31. Further, BNS’s attractive NTM (next 12 months) price-to-earnings multiple of 9.7 makes it an excellent buy.
Northland Power
Northland Power (TSX: NPI) develops, owns, and operates various energy infrastructure assets, with a total power-producing capacity of 3.2 gigawatts. It sells the power produced from these facilities through long-term PPAs (power purchase agreements), shielding its financials from market fluctuations. Supported by its expanding asset base and long-term PPAs, the company has grown its EBITDA at a 5% CAGR for the last five years, allowing it to reward its shareholders with monthly dividends. It currently offers a monthly dividend of $0.10/share, with its forward dividend yield at 6.2% as of the March 10 closing price.
Moreover, the Toronto-based energy company continues expanding its asset base and hopes to increase its power-producing capacity to 6 gigawatts by the end of 2027. Amid this expansion, the company’s management projects its EBITDA to reach $1.6–1.8 billion by 2027, with the midpoint of the guidance representing annualized growth of 10.4%. Given these healthy growth prospects, NPI could continue rewarding its shareholders with a healthy dividend yield. Moreover, the company’s NTM price-to-earnings multiple stands at 12.4, thus offering an opportune buying opportunity.
