In 2025, the Canadian stock market offers a treasure trove of value stocks for investors seeking stable returns without breaking the bank. These undervalued gems often belong to well-established companies with solid fundamentals, providing a cushion against market volatility. But where can investors find these valuable stocks, and what do they look for? Today, we’re going to focus on two value stocks that offer income, growth, and the potential for long-term gains. Let’s get into it.
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A “Power” stock
One such value stock is Power Corporation of Canada (TSX: POW). As of Sep. 30, 2024, the value stock reported net earnings from continuing operations of $371 million, or $0.58 per share, a decrease from $997 million, or $1.50 per share, in the same quarter of 2023. Despite this dip, the value stock’s adjusted net asset value per share rose to $57.92, up from $53.53 at the end of 2023, indicating a strengthening balance sheet.
POW’s diversified portfolio, including significant stakes in financial services and renewable energy, positions it well for future growth. The value stock’s focus on sustainable investments aligns with global trends, potentially enhancing its long-term value. And that means long-term gains for investors.
A “Great” stock
Another noteworthy player is Great-West Lifeco (TSX: GWO), a leading insurance and financial services provider. In the fourth quarter of 2024, GWO reported record base earnings of $1.1 billion, or $1.20 per share, marking a 15% increase from the same period in 2023. For the full year, base earnings reached $4.2 billion, or $4.50 per share, up 14% from the previous year.
GWO’s robust performance is underpinned by its diversified operations across Canada, the United States, and Europe. The value stock’s strong capital position, with a Life Insurance Capital Adequacy Test (LICAT) ratio of 130%, provides a solid foundation for future growth and shareholder returns.
A winning pair
Investors eyeing value stocks like POW and GWO should consider their consistent earnings growth, strong balance sheets, and strategic positioning in their respective industries. These factors contribute to their potential as attractive investment opportunities in the Canadian market.
However, one of the best factors contributing to a potential investment has to be the dividend from both of these stocks. Power stock currently offers a yield of 4.46% at the time of writing. Meanwhile, Great West stock offers a similar 4.54% dividend yield. This means even if the stocks don’t move a millimetre, investors can still look forward to income coming their way in the form of dividends. And those dividends have continued to be paid out — no matter the market situation.
Bottom line
The Canadian market in 2025 presents promising value stocks like Power Corporation of Canada and Great-West Lifeco. The strong financial performance and strategic initiatives make them worthy of consideration for investors seeking stable returns. As always, aligning investment choices with individual financial goals and risk tolerance is paramount. Consulting with financial advisors can provide personalized insights tailored to specific investment objectives. But if you’re looking for passive income through dividends at a valuable price, then these two value stocks are worth a look.
