Canadian investors looking to generate market-beating returns should consider gaining exposure to quality growth stocks trading at a cheap multiple. In this article, I have identified two such TSX stocks to own with $2,000 in 2025. Let’s dive deeper.
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Is this top TSX stock undervalued?
Valued at a market cap of $2 billion, Ero Copper (TSX:ERO), is engaged in the exploration, development, and production of mining projects in Brazil. Its flagship asset includes Caraíba operations that comprise the production and sale of copper concentrates located in northeastern Brazil, as well as gold and silver produced and sold as by-products.
In the second quarter (Q2) of 2025, Ero Copper reported record consolidated copper production while successfully bringing its Tucumã operation to commercial production.
Ero’s operational excellence framework is paying dividends across the portfolio. At Caraíba, copper production surged 25% quarter over quarter, driven by a 50% reduction in unplanned downtime and more than 10% improvement in mobile equipment availability.
Global demand for copper is expected to soar due to electrification and renewable energy infrastructure, and Ero’s diversified Brazilian operations provide exposure to one of the world’s most copper-rich regions. The company’s Xavantina gold operation also grew by 17% on the back of mechanized mining methods, diversifying the revenue stream.
Ero reported an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $82.7 million in Q2. Further, it reduced its net-debt-to-EBITDA ratio from 2.4 times to 2.1 times and ended the June quarter with $113 million in total liquidity.
Ero expects production to rise in the second half of 2025, which should translate to higher margins and cash flows. The copper miner is well-positioned to strengthen its balance sheet and reduce its leverage ratio over the next 12 months.
Analysts tracking the TSX mining stock forecast revenue to rise from $670 million in 2024 to $1.42 billion in 2027. In this period, adjusted earnings are forecast to expand from $1.11 per share to $4.34 per share.
If the TSX stock is priced at 10 times forward earnings, which is in line with its five-year historical average multiple, it could trade at $43 per share, indicating an upside potential of over 100% over the next 18 months.
Is this small-cap TSX stock a good buy?
Valued at $550 million by market cap, North American Construction Group (TSX:NOA) provides mining and heavy civil construction services to customers in the resource development and industrial construction sectors in Australia, Canada, and the United States.
NOA offers mine management services for a thermal coal mine, and construction and operations support services in the Canadian oil sands region.
The TSX stock has returned close to 650% to shareholders over the past decade. However, it also trades 45% below all-time highs, allowing you to buy the dip and benefit from outsized gains when investor sentiment recovers.
NOA stock pays shareholders an annual dividend of $0.48 per share, which translates to a yield of 2.6%. Moreover, the TSX stock is forecast to end 2029 with a free cash flow of $217 million, compared to an outflow of $53 million in 2024.
Given its outstanding share count, NOA’s annual dividend expense is roughly $30 million, which indicates the dividend distribution is sustainable, driven by widening cash flow margins. If NOA is priced at 10 times forward FCF, it should surge roughly 300% over the next four years.
