3 Canadian Value Stocks I’d Add to My TFSA for Tax-Free Compounding

Here are three top Canadian value stocks you can buy and hold in a TFSA in April 2025.

Investing in quality stocks trading at a discount is a proven strategy to generate outsized gains and beat the broader indices. The market turbulence in 2025 provides long-term investors with an opportunity to buy the dip and gain exposure to undervalued TSX stocks. Moreover, if these stocks are held in a TFSA (Tax-Free Savings Account), any returns in the form of dividends or capital gains will be exempt from taxes.

In this article, I have identified three Canadian value stocks I’d add to my TFSA for tax-free compounding.

Make a choice, path to success, sign

Image source: Getty Images

Is this cannabis stock undervalued?

Valued at a market cap of $228 million, High Tide (TSXV: HITI) is engaged in the retail cannabis business. In recent years, Canadian cannabis stocks have grossly underperformed the broader markets due to several issues that include an oversupply of marijuana products, increasing competition, cannibalization from the illegal market, and overvalued acquisitions.

High Tide stock trades 80% below all-time highs, making it attractive to contrarian investors. It reported a revenue of $522.3 million in fiscal year 2024 (ended in October) and is forecast to grow sales at an annual rate of 12% over the next five years.

Moreover, High Tide reports consistent profits and a positive free cash flow. Analysts expect the Canadian marijuana stock to expand its adjusted earnings per share to $0.64 in fiscal year 2029, up from $0.02 per share in 2024.

Given consensus price targets, High Tide trades at a discount of 113% in April 2025.

A quality TSX mining stock

Valued at a market cap of $1.55 billion, Endeavour Silver (TSX: EDR) is a silver mining company with properties located in Mexico and China. In 2024, Endeavour Silver reported production of 7.6 million ounces of silver equivalent, hitting the high end of revised guidance despite equipment challenges at its Guanacevi mine. It posted a total revenue of $218 million, up 6% year over year, with adjusted earnings of $0.03 per share.

Chief Executive Officer Dan Dickson highlighted that the Terronera project has reached 89% completion, with commercial production expected in the third quarter of 2025. The $332 million project remains on budget. Endeavour is also advancing its Pitarrilla project in Durango, Mexico. This project contains nearly 600 million ounces of silver, and in 2025, $26 million will be allocated for exploration and development.

Industrial demand for electrification and renewable energy applications has driven silver prices higher, alongside growing supply constraints. Analysts also expect the mining stock’s adjusted earnings per share to increase from $0.04 in 2024 to $0.60 in 2026.

Is the undervalued TSX stock a good buy?

The final Canadian value stock on my list is Magellan Aerospace (TSX: MAL). With a market cap of $760 million, Magellan provides complex assemblies and systems solutions to aircraft and engine manufacturers and space agencies. It designs, engineers, and manufactures aero-engine and aerostructure assemblies and components for aerospace and space markets.

Analysts expect Magellan to increase its sales by 10% annually in the next two years. Comparatively, adjusted earnings are forecast to almost triple from $0.62 per share in 2024 to $1.53 per share in 2026.

If the TSX stock is priced at 25 times trailing earnings, it should trade at $20 in April 2027, indicating an upside potential of almost 50% from current levels.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Metals and Mining Stocks

Investor reading the newspaper
Stocks for Beginners

Steel is Back in the Headlines: This Iron Ore Royalty Pays You to Watch

Labrador Iron Ore Royalty offers a variable dividend, with mine recovery carrying more weight than steel-policy headlines.

Read more »

financial chart graphs and oil pumps on a field
Dividend Stocks

This TSX Royalty Stock Pays Its Monthly Dividend Today: The Payout Math Behind It

Freehold pays eligible shareholders today, with a $10,000 investment offering about $52 monthly at the current dividend.

Read more »

panning for gold uncovers nuggets and flakes
Stocks for Beginners

Gold Pulled Back From Its Record: This Royalty Stock Raised Its Dividend 18%

OR Royalties offers a different way to own gold exposure, with strong dividend coverage and a modest starting yield.

Read more »

gold prices rise and fall
Stocks for Beginners

Gold is Near $4,200: This Miner Pays You to Wait

Agnico's cash position supports its dividend, but gold-price sensitivity and a modest starting yield define what investors actually receive.

Read more »

Nuclear power station cooling tower
Stocks for Beginners

Canada and India Are Talking Nuclear Power: Is Cameco Stock Still a Buy?

Cameco’s India agreement is real business, but its uranium volumes were already included in broader contracting disclosures.

Read more »

A plant grows from coins.
Stocks for Beginners

Brazil’s Election Could Move Commodity Markets: I’d Watch This Canadian Miner

Lundin’s Brazilian operations create a direct link between the election, currency movements and mine costs.

Read more »

nugget gold
Stocks for Beginners

Gold Just Had a Rough Week: Is This Canadian Miner Still Worth Buying?

Agnico Eagle shares had a rough week, but record cash flow and a net-cash balance sheet keep the thesis interesting.

Read more »

panning for gold uncovers nuggets and flakes
Metals and Mining Stocks

Gold, Silver, and Copper Prices Are Gaining Steam: 2 Mining Stocks Back in Favour

Mining stocks are back in favour driven by higher average realized prices as gold, silver, and copper gained steam and…

Read more »