Don’t Sleep on These Canadian Stocks to Buy Now

Undervalued TSX picks offer steady cash flow, dividends, and discounted valuations for patient investors.

Key Points
  • Calian is undervalued with diverse defence, healthcare, and tech contracts, low debt, steady cash flow, and a growing 2.3% dividend.
  • North American Construction has transformed into a steady cash generator with a strong backlog, high fleet use, and a cheap 7.6x earnings valuation.
  • Richelieu’s wide distribution network, acquisitive growth, and debt-free balance sheet deliver durable free cash flow and a modest dividend.

If you’ve been sitting on the sidelines, you may be missing out on some of the best opportunities Canadian investors have seen in years. There are solid TSX stocks trading at discounts despite strong fundamentals. While markets have bounced from last year’s lows, many remain undervalued, offering generous dividends and long-term growth potential. Waiting too long could mean paying more later for the same Canadian stocks that are quietly compounding for patient investors right now. So let’s look at some to watch on the TSX today.

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CGY

Calian Group (TSX: CGY) operates in four defensive and growing sectors of advanced technologies, health, learning, and IT & cyber solutions. What makes Calian especially compelling right now is how undervalued it looks relative to its fundamentals. The Canadian stock recently reported revenue at $192 million, driven by expanding defence and healthcare contracts, all while maintaining a solid backlog that provides visibility well into next year.

Calian’s balance sheet also reinforces its long-term appeal. It carries little debt, generates consistent free cash flow, and pays a sustainable dividend that it has quietly grown over time. The Canadian stock has a long track record of smart, accretive acquisitions, adding niche capabilities in areas like cybersecurity, training systems, and satellite communications.

Despite its steady execution, Calian still trades at a modest 11 times earnings compared to its peers in defence, IT, and healthcare services. The market hasn’t fully priced in its predictable growth or the long-term tailwinds behind its business lines. CGY stock has a 2.3% dividend at writing.

NOA

North American Construction Group (TSX: NOA) is one of those rare Canadian stocks that has quietly transformed itself from a cyclical, debt-heavy contractor into a steady cash-flow generator. The Canadian stock provides heavy construction and mining services to major resource producers across Canada, primarily in Alberta’s oil sands.

Recent results underscore its recent transformation. In 2025, the Canadian stock announced continued growth in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and robust fleet utilization across its major mining and civil projects. Its backlog remains strong, bolstered by new multi-year contracts in resource development and infrastructure work. Plus, NOA’s partnerships with major producers give it steady visibility into future revenue.

Yet despite these improvements, NOA still trades at a valuation that makes little sense for a company of its quality. The stock’s price-to-earnings ratio remains well below the market average at 7.6 times earnings. Investors have been slow to recognize just how much the business has changed. While many still view it as a pure oil sands proxy, NOA’s diversified project base now makes it far more resilient.

RCH

Richelieu Hardware (TSX: RCH) is another strong Canadian stock, distributing specialty hardware and materials used in cabinetry, furniture, and interior design. The magic of Richelieu lies in its resilient business model. Richelieu’s diversified customer base helps smooth out the ups and downs. It also operates an unmatched distribution network with more than 100 centres across North America, giving it both scale and reach that competitors can’t easily replicate.

Recent results highlight why investors shouldn’t sleep on RCH. Though short-term earnings were pressured by elevated inventory costs and softer renovation activity, revenue growth remains solid, boosted by continued acquisitions and expanding product lines. Richelieu has made over 50 strategic acquisitions in the past decade, steadily adding niche hardware and design solutions that broaden its customer base and pricing power.

Beyond its operations, Richelieu has no meaningful debt and continues to generate strong free cash flow. This funds both dividends and share buybacks without financial strain. Right now, investors could bring in a 1.7% dividend yield while the dividend stock trades at just 18 times earnings.

Bottom line

If you’re an investor looking for solid dividend income that lasts, these are Canadian stocks you don’t want to sleep on. In fact, here’s what you could earn from dividends alone with a $7,000 investment in each stock.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYTOTAL INVESTMENT
RCH$37.36187$0.61$113.93Quarterly$6,988.32
CGY$48.65143$1.12$160.16Quarterly$6,956.95
NOA$19.24363$0.48$174.24Quarterly$6,983.12

So if you’re looking for dividend stocks other Canadians simply haven’t noticed yet, these are the ones to add to your watchlist. Before everyone else does.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Calian Group and Richelieu Hardware. The Motley Fool has a disclosure policy.

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