The Best Canadian Stocks to Buy With $25,000 Right Now

Here are the three best Canadian stocks you should consider buying right now to generate outsized gains in 2025 and beyond.

| More on:

Investing in quality growth stocks trading at a cheap multiple is a proven strategy to generate market-beating returns. It’s essential to consistently identify companies poised to grow revenue and earnings at a steady pace while trading at reasonable valuations.

In this article, I have identified three of the best Canadian stocks you can buy with $25,000.

Canadian Red maple leaves seamless wallpaper pattern

Source: Getty Images

Is this TSX stock undervalued right now?

NFI Group (TSX: NFI) is a Canadian bus manufacturer with a market cap of $1.78 billion. It operates globally in North America, the U.K., Europe, and Asia Pacific.

It designs and manufactures transit buses, coaches, medium-duty shuttles, and cutaway buses under brands including New Flyer, Alexander Dennis, and ARBOC. Through NFI Parts, NFI also provides electric vehicle infrastructure, aftermarket parts, and connected vehicle diagnostics.

Analysts tracking the TSX stock expect adjusted earnings to increase to $1.19 per share in 2026, compared to a loss of $0.03 per share in 2024. Comparatively, free cash flow is forecast to improve to $168 million in 2026 from an outflow of $18 million in 2024.

If NFI stock is priced at 20 times forward earnings, it should trade around $24 in May 2026, indicating an upside potential of 60% from current levels.

Is this TSX dividend stock a good buy?

Bird Construction (TSX: BDT) is a construction company that provides comprehensive construction services across industrial, building, and infrastructure markets. It specializes in complex industrial facilities, institutional buildings like healthcare and education facilities, civil infrastructure including roads and bridges, and commercial developments.

Bird offers electrical, mechanical, and instrumentation services, as well as modular fabrication and contract mining operations. It serves diverse sectors, including oil and gas, renewable energy, nuclear, and water treatment, providing both new construction and retrofit services.

BDT stock is down 20% from all-time highs and offers shareholders a dividend yield of 2.2%. Analysts tracking the TSX stock expect adjusted earnings to grow from $2.04 per share in 2024 to $3.93 per share in 2027. In this period, free cash flow is forecast to increase from $84 million to $170 million.

If BDT stock is priced at 15 times forward earnings, it could trade around $58 in May 2027, indicating an upside potential of over 100% in the next two years.

Is the energy stock a buy, sell, or a hold?

The final stock on the list is Alvopetro Energy (TSXV: ALV), which has a market cap of $214 million. Alvopetro Energy is engaged in acquiring, developing, developing, and producing hydrocarbons in Brazil and Canada.

In the last 12 months, the energy stock has paid investors a dividend of $0.40 per share, translating to a tasty yield of 8.4%. It suggests that Alvopetro’s annual dividend expense is around $14.6 million.

Comparatively, Bay Street expects its free cash flow to increase from $28 million in 2024 to $71 million in 2029. A widening cash flow should help Alvopetro raise its dividends and strengthen its balance sheet over the next few years.

If the TSX dividend stock is priced at just eight times forward free cash flow, which is reasonable, it will trade around $12 per share in early 2029, up 100% from current levels. If we include dividend reinvestments, cumulative returns could be closer to 150% over the next four years.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alvopetro Energy. The Motley Fool recommends NFI Group. The Motley Fool has a disclosure policy.

More on Dividend Stocks

coins jump into piggy bank
Dividend Stocks

This TSX Stock Yields More Than the Average Savings Account Today

Income-focused investors can start researching Enbridge stock on this dip for a potential buy for higher income for long-term capital.

Read more »

frustrated shopper at grocery store
Dividend Stocks

Inflation Eating Your Savings? This Stock Fights Back

For Canadians with a long-term investment horizon, Brookfield Infrastructure is a solid stock to potentially buy on dips and hold…

Read more »

Dividend Stocks

This 5% Dividend Stock Could Be the Ultimate Retirement Hack

This 5% dividend stock offers growing income backed by essential infrastructure assets, making it an intriguing option for retirement portfolios.

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

This Isn’t a “Quick Win” Stock: It’s a “Steady Builder” One

CN Rail (TSX:CNR) may be the steadiest compounder on the entire Canadian stock market.

Read more »

dividend growth for passive income
Dividend Stocks

1 Undervalued Canadian Dividend Stock to Buy Now and Hold for Decades

This stock is down 15% from the recent highs and now offers an attractive dividend yield.

Read more »

House models and one with REIT real estate investment trust.
Dividend Stocks

Here’s the 6.8% Dividend Stock I Keep Coming Back To

SmartCentres REIT (TSX:SRU.UN) stands out as a near-7% yield dividend play that's worth coming back to for yield.

Read more »

Child measures his height on wall. He is growing taller.
Dividend Stocks

New to Investing? Start With This Canadian Dividend Stock

This Canadian stock has a proven record of paying dividends and consistently raising their payouts in the years ahead.

Read more »

ETFs can contain investments such as stocks
Dividend Stocks

VFV Isn’t a Complete Portfolio: Here’s What Canadian Investors May Be Missing

VFV feels like a complete portfolio, but it’s really a concentrated bet on U.S. large caps and the U.S. dollar.

Read more »