Long-term investors are always on the hunt for undervalued gems that can weather storms — and thrive beyond that. While predicting the next biggest winners is no easy task, these three Canadian value stocks seem to offer a compelling mix of value, income, and resilience and could potentially outperform through 2030.
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Exchange Income: A quiet compounder
Exchange Income (TSX: EIF) isn’t often at the top of investors’ watchlists, but it probably should be. This holding company owns a diverse group of businesses in aerospace and aviation, and manufacturing — industries that may seem cyclical but have proven to offer steady cash flows for Exchange Income.
Since 2006, EIF has either maintained or increased its monthly cash distribution without interruption. While its five-year dividend-growth rate sits at a modest 3.5%, the stock currently offers a respectable yield of around 4.5%. That level of dependable income makes it potentially attractive to income investors.
Despite economic downturns — like the one during the COVID-19 pandemic — Exchange Income has consistently outperformed the broader market over the last five and 10 years. This historical performance suggests the company has what it takes to beat the market in the long run. For courageous value investors, market corrections could present prime opportunities to scoop up shares.
TELUS: A contrarian income play
TELUS (TSX: T) has seen better days. The telecom giant has slid from its 2022 peak and now trades in a narrow band between $19.50 and $22. Yet, for contrarians, this stagnation may spell opportunity.
Innate for telecom businesses are capital-intensive infrastructure upgrades and high debt levels. Furthermore, the telecom sector is grappling with pricing pressure from rising competition. TELUS can’t escape from these issues, but it’s responding by prioritizing customer retention, service differentiation, and operational efficiency.
At around $22 per share, TELUS now boasts a massive dividend yield of 7.5%. While its trailing-12-month free cash flow payout ratio hit 86% — above its long-term goal of 60–75% — management remains committed to dividend growth of 3–8% annually from 2026 through 2028.
Investors can collect a strong base return through dividends while waiting for price appreciation. If TELUS can successfully execute its plans and the market re-rates the sector, there could be some nice upside down the road.
goeasy: High risk, high reward
For investors with a strong appetite for risk, goeasy (TSX: GSY) offers both compelling value and significant growth potential. Trading at under $155 — roughly 25% below its 52-week high — this non-prime consumer lender is currently out of favour. But its fundamentals suggest that could change.
goeasy’s first-quarter results highlight strong demand for its lending products, including home equity lending, point-of-sale financing, and automotive financing. Year over year, loan portfolio grew 24% to $4.79 billion, revenue rose 9.7% to $392 million, and the net charge off rate was 8.9%, within its target of 8.75–9.75% for the quarter.
Although the operating margin was 37.0% (down from 38.6% a year ago), the operational efficiency improved, with the efficiency ratio falling by 4.7% to 26.1%. Ultimately, adjusted earnings per share fell 8% to $3.53.
To account for economic uncertainty, goeasy raised its credit loss allowance from 7.38% to 7.86%, reflecting a cautious stance amid macro headwinds. However, management remains confident in achieving its 2025 targets, thanks to ongoing optimization in pricing, products, and collections.
Because of this backdrop, goeasy trades at a discount of about 20% to its historical valuation and offers a dividend yield of nearly 3.8%. For long-term investors who can stomach risk and volatility, this could be an exciting addition to a diversified value portfolio.
Value that could shine bright
While no one has a crystal ball to predict the future, Exchange Income, TELUS, and goeasy each offer something rare in today’s market: solid businesses trading at attractive valuations with real potential for long-term outperformance. By blending stable income, contrarian opportunity, and growth at a reasonable price, these stocks could quietly become some of the best-performing value plays through 2030.
