Finding undervalued stocks in what most investors would call an overvalued market (or at least a fairly priced market) is difficult. Indeed, valuations continue to hover around all-time highs. But even with so much attention being paid to the ever-evolving macro landscape, equities have continued to perform relatively well thus far in 2025.
For investors betting on a continuation of these trends, there are a few Canadian hidden gems I think are worth considering. Here are three of my top picks for investors looking for a mix of growth, income, and value moving forward.
The Metals Company
On the growth front, The Metals Company (NASDAQ:TMC) is one of my top picks for aggressive investors looking for long-term upside potential.
I’ve touted this company in the past, but now that it’s starting to get more attention in the media as licenses for deep-sea mining are officially being considered in key jurisdictions, I think now may be the time for investors to consider adding exposure before the crowd jumps in.
The Vancouver-based company focuses on exploring the sea floor for deposits of battery metals. In doing so, the hope is that the company can replace a significant amount of above-ground mining, which has been very detrimental to the environment.
Indeed, for those bullish on the electrification trend that’s underway, TMC is one of my top ideas as a way to play this space.
National Bank
Often overlooked due to the fact that National Bank of Canada (TSX:NA) isn’t one of Canada’s five largest banks, I think National Bank could have one of the more attractive growth profiles of its peer group in this current environment.
Some of that view is tied to the company’s rock-bottom valuation multiple, which stands at around 11 times earnings. That’s dirt cheap for any stock. While there are reasons for this relatively low multiple, it’s hard to make an argument that any stock with reasonably consistent financial footing should be trading at these levels.
Now, the company’s focus on higher-risk segments of the lending market, including commercial loans and those tied to commercial real estate, has come under scrutiny from investors. But with the market appearing to have levelled off, this is a stock I think market participants are right to want to step back into.
I’m going to wait for a pullback on this name, personally. But for investors seeking an overlooked Canadian stock worth considering, this is one to at least add to the watch list right now, in my view.
Killam Apartment REIT
One of the top real estate investment trusts (REITs) I haven’t discussed in quite some time, but which I think still carries tremendous long-term upside, is Killam Apartment REIT (TSX:KMP.UN).
Shares of the apartment-focused REIT have stagnated somewhat in recent years, sinking roughly 25% since the company’s late-2021 peak.
Unlike other pandemic-era names that declined due to a slowing of growth-related fundamentals, much of Killam’s decline appears to have more to do with interest rates than anything else. But given the quality of the markets Killam operates in, and the more affordable nature of a number of its developments, this is a play on the real estate sector in Canada I think may have been beaten down too far.
If shares decline from here toward the $16 level, I’d be a buyer, though this is a stock I think investors can be patient with and buy and hold here. It really depends on one’s investing time horizon and willingness to wait before pulling the trigger.
