It’s true that market corrections can be uncomfortable. But for value-focused investors, such corrections tend to bring some of the best opportunities. Right now, with the TSX struggling to hold ground in early 2025 amid worries about trade tensions and inflation weighing on sentiment, many great Canadian stocks are trading at rare discounts.
That’s why it could be the right time to focus on quality companies whose long-term prospects haven’t changed much, even if their share prices have taken a temporary hit. Let’s take a closer look at two such fundamentally strong value stocks listed on the Toronto Stock Exchange.
Image source: Getty Images
BRP stock
Down 50% over the last 12 months, BRP (TSX: DOO) is the first value stock I’d be looking at during this market correction. This Valcourt-based firm focuses on making recreational vehicles and powersports products. Right now, BRP stock is trading at around $46.69 per share, giving it a market cap of about $3.4 billion. On top of that, it offers a 1.8% annualized dividend yield, which can be a nice bonus for income seekers.
A broader slowdown in recreational vehicle demand could be one of the key reasons behind DOO stock’s recent declines. BRP’s revenues slipped by nearly 20% YoY (year over year) in the January 2025 quarter because of weaker demand and the company’s strategy to trim network inventory. In addition, its normalized EBITDA (earnings before interest, taxes, depreciation, and amortization) fell by about 45% from a year ago, partly due to lower shipment volumes and higher promotional spending.
But despite these short-term challenges, BRP is continuing to focus smartly on the future. For example, in recent quarters, the company trimmed dealer inventories faster than competitors to protect brand value, even if it meant sacrificing some short-term sales. It’s also leaning hard into its powersports core business while scaling back its marine operations, which could sharpen its focus and growth prospects down the line.
Overall, with a strong product lineup and innovation plans in motion, BRP looks like a classic case of a temporarily beaten-down stock with strong rebound potential once the market stabilizes.
Magna stock
Another top-value stock catching my eye during this correction is Magna International (TSX: MG). This global mobility technology giant is known for building everything from auto body parts and advanced driver assistance systems to complete vehicles. Right now, MG stock trades around $47.38 per share with a market cap of about $13.4 billion. Besides, it offers an attractive annualized dividend yield of nearly 5.9%.
Over the past year, the stock has slipped nearly 29%, mainly reflecting industry-wide challenges and lower vehicle volumes in its key markets. However, in the fourth quarter of 2024, the company’s sales still managed to grow 2% YoY to US$10.6 billion, supported by new program launches and stronger engineering revenues. Similarly, smart operational execution helped it post a strong 27% YoY increase in its adjusted quarterly earnings to $1.69 per share.
Moreover, Magna is increasing its focus on expanding its margins, boosting cash flow, and even trimming capital spending to keep things efficient. With its 2026 sales and earnings projected to climb, Magna could see a quick bounce back once market sentiment improves.
