If you don’t want to miss a great investment opportunity that could quietly change the game for your portfolio, this might be the time to look beyond the giants on Bay Street. While large-cap stocks may give you exposure to some well-established businesses, some of Canada’s most interesting growth stories aren’t always happening in billion-dollar blue chips. Instead, they seem to be unfolding in smaller companies right now, where fast-growing earnings and smart strategies are driving strong momentum.
In this article, I’ll talk about two such Canadian small-cap stocks to buy right now, which could be on the verge of a major breakout.
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Enerflex stock
Let’s start with Enerflex (TSX:EFX), a small-cap energy stock that has been quietly gaining major traction. Based in Calgary, it operates in the energy infrastructure segment, delivering several services, including natural gas processing, compression, and power generation.
EFX stock currently trades at $17.82 per share with a market cap of about $2.2 billion. It pays a small quarterly dividend that yields roughly 0.8% annually. Over the last year, the stock has surged 84%, as improving operations and debt reduction have helped it regain investor confidence.
In its third quarter of 2025, Enerflex posted a solid 21% YoY (year-over-year) increase in its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to a record US$145 million, with the help of strong project execution and cost-saving initiatives. Similarly, its revenue for the quarter climbed nearly 29% to US$777 million, backed by the successful delivery of the Bisat-C Expansion project in Oman, which alone added US$116 million to its top line.
Even with heavy project investments, Enerflex generated US$43 million in free cash flow in the latest quarter. This could be one of the key reasons why the company also announced a 13% increase in its quarterly dividend.
Interestingly, the energy infrastructure firm now has US$1.1 billion in engineered systems backlog and US$1.4 billion in energy infrastructure contracts, giving its revenue excellent visibility. These are some of the key reasons why long-term investors may not want to sleep on this small-cap stock.
AGF Management stock
AGF Management (TSX:AGF.B) could be another fundamentally strong small-cap stock you can buy right now. Headquartered in Toronto, it’s an independent and globally diversified asset management firm with over $59.9 billion in total assets under management and fee-earning assets.
Following a 36% gain in the last year, AGF stock now trades at $14.52 per share, giving it a market cap of about $942 million. At this market price, it also offers a 3.4% annual dividend yield.
Despite the ongoing macroeconomic uncertainties, the company continues to deliver consistent results across its investment and private wealth segments. In the third quarter of its fiscal 2025 (three months ended in August), AGF posted a strong 24% YoY rise in its adjusted earnings to $0.46 per share due mainly to its higher performance-based compensation and improved fee revenue.
Adding to the positive momentum, the firm’s mutual fund net sales hit $262 million in the latest quarter, showing a huge jump from just $19 million a year ago.
In addition to these solid numbers, AGF’s free cash flow of $30.6 million and steady quarterly dividend of $0.125 per share underline its ability to reward shareholders while investing in growth. In light of this, this stock could fit perfectly into a long-term investor’s portfolio, especially for those seeking strong returns from a smaller, well-run financial firm.
