Despite the tariff and trade war between Canada and the United States, Canadian stocks have fared reasonably well. The TSX Composite Index is still up by 2.8% year to date. That is considerably better than stocks in the U.S. where the S&P 500 has fallen by 2.8%.
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Canadian stocks may prosper because the value is there
This performance may be because many Canadian stocks trade at a discount to their U.S. peers. Many U.S. stocks were overvalued. Whereas most Canadian stocks are fairly valued or even undervalued.
Canada also has a plethora of safe dividend stocks investors can hide in during times of volatility. Canada might be a great place to stay invested in over the next three to four years.
If you are looking for an attractive mix of dividends, dividend growth, and stock appreciation, here are three Canadian stocks that present attractive value today.
A cheap growth stock with a great dividend
goeasy (TSX:GSY) stock has faced selling pressure as the market worries about a weakening consumer. goeasy provides loans to the sub- and non-prime consumer market. These are generally consumers who the bigger bank players reject.
While that is a riskier segment, goeasy does offset its risk by smart underwriting and elevated interest rates. Big banks have been tightening their underwriting policy, so more high-quality consumers have been coming to goeasy. As a result, it has been able to deliver solid growth even through a weakening economy.
goeasy has been a dividend-growth legend. It has grown its annual dividend per share by a +30% compounded annual growth rate (CAGR). Right now, this Canadian stock yields 3.7%. It trades with a price-to-earnings ratio below 10, despite its strong double-digit growth over the past several years.
A Canadian energy stock with catalysts for upside
Cenovus Energy (TSX:CVE) is another Canadian value stock to look at today. With a market cap of $36 billion, it is one of Canada’s largest integrated energy producers. While Cenovus has not performed very well in the past year (it is down 28%), the company is starting to look like a bargain.
Cenovus has had endless problems with its refining business. Right now, those assets are barely factored into the stock price. Some analysts are suggesting Cenovus monetize its refining assets and just focus on what it is good at: producing oil. If that were to occur, there would likely be a nice uplift in the stock.
In the meantime, Cenovus has significantly reduced debt to the point where it can return almost all its excess cash flow to shareholders. This is coming in the form of aggressive share buybacks and dividend growth. Its dividend per share is up 800% since 2021. It yields 3.6% today.
A top Canadian financial stock for value and income
EQB (TSX:EQB) is the parent company of EQ Bank. If you are not familiar with it, it is Canada’s largest online-only banking platform. Many may not know it, but it is the best-performing bank in Canada over the past decade.
Due to its online-only presence, it can earn above-average returns on equity. The company is very well managed and continues to expand its service offerings. It is still in the early innings of its growth trajectory.
Despite this, it only trades for eight times 2025 expected earnings. That makes it one of the cheapest Canadian bank stocks you can find.
EQB’s dividend yields 2% today. It has increased its dividend per share by a 19% CAGR over the past 10 years. The stock is down 5% in the past six months, so it could be an interesting time to add this Canadian stock.
