Even though the TSX Composite Index is setting new all-time highs this year, many high-quality Canadian stocks have failed to enjoy the rally. Mining, financials, and consumer staples have all delivered strong performance in 2025.
However, many components of the Index have only seen modest gains. This is where the diamonds in the rough can be found. If you are looking for some undervalued Canadian stock ideas with substantial potential upside, here are three to consider right now.
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A fintech growth stock down in 2025
Propel Holdings (TSX: PRL) stock is down 10.6% year to date. It is trading with a forward price-to-earnings ratio of only nine right now.
It also has an attractive 2.45% dividend yield. Propel has increased its annual dividend per share seven times in the past three years. In that period, its dividend has nearly doubled!
Propel provides a specialized lending platform to the non-prime market. The company has seen its five-year revenues rise by a +40% compounded annual growth rate (CAGR) and earnings per share (EPS) by a 70% CAGR. Year to date, adjusted EPS increased 19% to $1.42.
With the economy weakening, banks are tightening their lending. That should continue to send customers to Propel. Its recent U.K. acquisition has been a near-term drag on earnings. However, it will provide long-term growth opportunities in Europe as it gives Propel a foothold in the region.
A Canadian trucking stock down temporarily
TFI International (TSX: TFII) is another Canadian stock that has sloped in the wrong direction this year. Its stock is down 33% this year. Operational issues, a slowing economy, and a freight recession all contributed to a serious decline in earnings.
Yet, this is an intriguing time to add the stock. TFI has a long-term record of creating substantial shareholder value. Its stock is up 450% in the past 10 years. This is due to its low-cost operating model and a smart serial acquisition strategy.
In a normal environment, this stock should hit close to $8 per share in earnings. That would put the stock in a mid-teens price-to-earnings range. With the stock depressed, management has noted that it is focused on buying back shares rather than making acquisitions.
The company is still generating strong free cash flows, so it certainly has the capacity to do so. It means that out of the bad cycle, its earnings (and the stock) could really recover quickly. With a 1.9% dividend yield right now, you can be a little patient for the turnaround to happen.
A Canadian waste stock set to rerate upward
Secure Waste Infrastructure (TSX: SES) is an undervalued Canadian stock that could still have more upside. Its stock is only up 4.4% this year.
This company is trash. Well, sort of. Across Western Canada, it processes a good majority of the waste produced by the energy and industrial sectors. It is also expanding into metal recycling. Trump’s tariff agenda has hurt this segment. It has temporarily slowed earnings. However, the company still projects high single-digit growth this year.
Secure has a very strong competitive placement in Western Canada. In many instances, it is the only waste provider in its operating regions. That limits competition and maintains strong pricing power.
Despite its resilient (and growing) business, Secure trades at a significant discount to other waste peers. If it can execute its growth plans, it should be due for a valuation re-rating. It pays a 2.4% dividend yield while you wait.
