With the TSX trading off new all-time highs, it is harder and harder to find stocks trading at attractive valuations. Canadian investors need to be a little thrifty right now. The market is hot, but we are likely due for a correction later in the year.
If you are looking for a nice combination of good value and reasonable growth, here are three stocks to buy with $3,000 right now.
Calian Group: A cheap stock with some catalyst
Up until 2022, Calian Group (TSX:CGY) was a very good stock for investors. However, the company has struggled with consistency. A few quarterly misses have pushed the stock down over the past couple of years.
Yet, Calian is very well positioned for the future. Over 50% of its business is from defence or military contracts. Whether it be providing mental health services to service members or designing battle/training plans for NATO, Calian provides a wide array of crucial services.
With the Canadian government (and several other Western nations) set to drastically increase defence spending, Calian is perfectly positioned to win some major contracts in 2026 and beyond.
Recent news about an activist investor getting involved is putting some lift in the stock. Yet, it still only trades for 11 times earnings right now. Not many companies (with substantive potential growth) trade for that kind of multiple. With a 2.1% dividend yield, it is an interesting buy right now.
Pembina Pipeline: A bargain-priced infrastructure company
Pembina Pipeline (TSX:PPL) has had a bit of a rough year. It had to renegotiate the regulated contracts for one of its main egress pipelines in Canada. The new rates were not great, but the outcome could have been worse. Its stock is down 2% this year. While that is not bad, its pipeline peers are up mid-single digits this year.
Fortunately, the worst news appears to be in the rear-view mirror. Pembina remains a strong business. Around 85% of its income comes from fee-based contracts. The company targets 4-6% growth in its fee-based income over the next several years.
Pembina has a growing pipeline of high-quality, highly important capital projects. This includes its Cedar LNG project, which is set for completion in 2028.
Pembina has a sector-leading balance sheet, and most of its growth is supported by internal cash flows (and not equity dilution). Pembina stock pays a 5.5% dividend, which it has been raising annually by a low single-digit rate.
Right now, its stock is trading at the low end of its 10-year valuation range. It trades at a significant discount to peers. If it can execute its growth plans, there is no reason this stock should trade at a discount.
TFI International: A turnaround stock for patient investors
TFI International (TSX:TFII) has been a great long-term compounder for shareholders. Its stock is up 440% in the past 10 years. However, it has recently come under some hard times after its stock has fallen by about 35% this year.
TFI is being hurt by a challenging freight recession in North America. U.S. tariffs certainly have not helped this situation. TFI also had some underperforming operations in America that have impacted results.
Fortunately, management changed its U.S. leadership team and is seeing operational progress in recent quarters. While its stock is down, TFI has been aggressively buying back stock. At 10 times free cash flow (or a 10% free cash flow yield), the company certainly looks attractive.
Once the freight environment improves, this stock could really bounce back. There might still be some tough quarters, but I’d bet on this management team and its quality operations any day.
