2025 was a good year for the TSX Index. Yet, many Canadian growth stocks are down and out this year. Plenty of good quality businesses are trading at very attractive valuations. If I had $4,000, here are four cheap Canadian stocks I would buy for 2026.
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A top Canadian defence stock
Calian Group (TSX: CGY) has underperformed expectations for a couple of years. This $650 million market cap company only trades with a forward price-to-earnings ratio of 13 right now.
The good news is its prospects are turning around. Calian is an important supplier of healthcare, training services, and satcom hardware to the Canadian military. It has likewise become an important provider to many NATO member nations.
With defence spending set to rise over the coming five years, Calian should be a major beneficiary. It is already forecasting double-digit growth for 2026. On a growth-to-value basis, it is hard to find a better stock in Canada.
A top aerospace stock
Firan Technologies (TSX: FTG) is another small-cap stock that could be a good buy for 2026. This Canadian stock trades with a price-to-free cash flow ratio of 15.5. While it is not cheap like it was this time last year (its stock is up 50% in that time), Firan stock still trades at a material discount to similar aerospace parts providers in the U.S.
Firan provides circuit boards, cockpit components, and aftermarket hardware components. Demand for new aircraft is near insatiable. The top aircraft OEMs can’t produce them quickly enough.
This provides a decade-long tailwind for Firan. Its parts are used in an array of commercial and defence aircraft. The company has a strong balance sheet and generates good free cash flows. This Canadian stock is a solid pick for 2026 and beyond.
A leading global engineering stock
WSP Global (TSX: WSP) stock is down 10% in the past six months and down 4% this year. Its trading close to its lowest enterprise value (EV)-to-earnings before interest, tax, depreciation, and amortization (EBITDA) ratio in the past five years.
Yet, WSP has been delivering great results in 2025. Year to date, revenues are up 17%, and EBITDA is up 20.4%!
WSP just announced a substantial acquisition that would position it as the largest engineering and advisory firm in the United States. After synergies are realized, the deal could provide high single-digit accretion. If this Canadian stock can continue to execute its strong acquisition and organic growth plan, there could still be plenty of upside in 2026.
A Canadian small-cap software stock
VitalHub (TSX: VHI) stock is down 20% this year. Yet, its financial performance has been very good. Year to date, revenues are up 62%, and EBITDA rose 43%.
VitalHub provides crucial software to the healthcare sector. It operates in Canada, the U.K., the Middle East, and Australia.
With over 20 acquisitions under its belt, it has used a software consolidation strategy to grow by geography and service base. It has $123 million of cash on the balance sheet, so it has ample opportunities to keep growing by acquisition.
At face value, this Canadian stock is not cheap. However, with an EV/EBITDA ratio of 13, it is trading at its lowest value in three years. If it can smartly deploy its cash, there could be significant growth in 2026 that would support its current value.
