With volatility and uncertainty remaining heightened in the current environment due to the significant tariff threats around the world and worries about a potential trade war, there are plenty of top Canadian value stocks that investors can add to their TFSA today.
There’s no question that this uncertain environment creates excellent buying opportunities for long-term investors.
However, while there are plenty of opportunities, as always, it’s essential to ensure that the companies you’re investing in are high-quality and have the ability to weather the storm in the near term, in addition to growing their operations considerably over the longer term.
So, if you’ve got cash on the sidelines and are looking to take advantage of the recent sell-off in many high-quality Canadian companies, here are two of the top Canadian value stocks to buy today.
One of the best growth stocks on the TSX
It’s not often that high-quality growth stocks trade at attractive valuations. So, when you get the chance to buy these stocks on the dip, it’s essential to take advantage of it.
That’s why one of the top Canadian value stocks to buy right now is goeasy (TSX:GSY).
goeasy is a specialty finance company that offers loans primarily to consumers with below-prime credit ratings. This is a business that’s not without risk. However, it’s also a business that has massive potential.
Lending to consumers with below-prime credit ratings allows goeasy to charge higher interest rates to compensate for the additional risk. Therefore, because the stock has consistently managed that risk well and constantly kept charge-off rates within its target range, the stock’s profitability continues to grow rapidly each year.
In fact, over the last five years, goeasy’s normalized earnings per share (EPS) have increased from $5.17 to $16.71, which is a compound annual growth rate of 26.4%.
Furthermore, even with significant uncertainty in the macroeconomic environment today, analysts still estimate that goeasy’s normalized EPS will increase by 18.1% this year and another 16.6% next year.
Therefore, with the impressive growth stock trading roughly 25% off its 52-week high, it’s easily one of the top Canadian value stocks to buy now.
At roughly $155 per share, goeasy is trading at a forward price-to-earnings (P/E) ratio of just 7.9 times, well below its five-year average forward P/E ratio of 10.5 times.
So, not only does the stock offer investors a significant opportunity as it eventually rallies back to fair value, but it also continues to have a tonne of long-term growth potential, making it one of the top Canadian value stocks to buy today.
In fact, of the seven analysts covering goeasy, six are currently giving it a buy rating, with one analyst giving it a hold rating. Furthermore, its average analyst target price is currently $222.28, a nearly 50% premium to where goeasy trades today.
Therefore, if you’ve got cash that you’re looking to put to work today, goeasy is easily one of the top Canadian value stocks you can buy.
One of the top value stocks on the TSX that Canadian investors can buy dirt-cheap
In addition to goeasy, another high-quality Canadian stock that’s trading unbelievably cheap in this environment is Cargojet (TSX:CJT).
It’s not surprising to see Cargojet trade off its highs in this environment due to the short-term headwinds it’s facing. However, it is surprising to see just how cheap the stock has become, trading nearly 50% off its 52-week high, which is why it’s one of the top Canadian value stocks to buy now.
There’s no question that uncertainty about tariffs and a potential slowdown in consumption would impact a stock like Cargojet, which is known for its time-sensitive overnight air cargo services that benefit from e-commerce shopping.
At the same time, though, many of these headwinds are temporary, and Cargojet’s dominant position, long-term customer contracts, and established logistics network mean it’s well-positioned to bounce back quickly and capitalize on growth opportunities as the macro environment improves.
Therefore, while Cargojet trades at a forward enterprise value to earnings before interest, taxes, depreciation and amortization (EV/EBITDA) ratio of just 5.8 times, considerably lower than its five-year average of 9.9 times, it’s easily one of the top Canadian value stocks to buy now.
