Finding undervalued stocks on the TSX isn’t as simple as just screening for low price-to-earnings (P/E) ratios or stocks trading near their 52-week lows. In fact, some of the cheapest stocks in the market are cheap for a reason.
That’s why the key to buying undervalued stocks isn’t blindly chasing low multiples. It’s about identifying high-quality businesses where the market has become overly pessimistic in the short term, even though the long-term outlook remains intact.
Sometimes that pessimism comes from temporary macroeconomic headwinds. Other times, it’s driven by sector-wide sentiment or one disappointing quarter.
If the company’s core operations are still strong, though, and its competitive advantages remain intact, those periods can create compelling buying opportunities for long-term investors
That’s why the best undervalued TSX stocks to buy aren’t businesses struggling to compete or turn a profit. The best investments are in strong companies trading below what they’re actually worth.
So, if you’re looking for quality TSX stocks that could surprise investors in 2026, here are three undervalued names worth considering today.
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One of the most undervalued TSX stocks on the market today
If you’re looking for a high-potential TSX stock to buy while it’s undervalued, goeasy (TSX:GSY) is the number one stock that should be on your radar.
goeasy is a specialty finance company that operates in the alternative lending space, offering consumer loans and lease-to-own products across Canada.
Over the years, it has built a highly profitable business model by serving a segment of the market that traditional banks often overlook. That has led to impressive and consistent growth for years.
In fact, its ability to grow its loan portfolio rapidly while maintaining disciplined underwriting standards is what’s allowed it to constantly expand revenue and earnings each year.
Despite that track record, the stock can trade cheaply when investors grow concerned about credit quality or the broader economy, which is what we’ve seen over the last few months.
So, now, with goeasy trading at a forward price-to-earnings ratio of just 5.6 times, well below its five-year average of 10.1 times, there’s no question it’s one of the best TSX stocks to buy while it’s undervalued.
A top residential real estate stock
In addition to goeasy, another high-quality Canadian stock that’s trading undervalued is Canadian Apartment Properties REIT (TSX:CAR.UN)
Canadian Apartment Properties REIT, better known as CAPREIT, is one of the largest residential landlords in Canada, owning a diversified portfolio of apartment properties across major markets.
So, while goeasy could surprise investors with how quickly it rebounds this year, especially if it can continue to generate impressive profitability, CAPREIT could surprise investors with how much upside it has.
Residential real estate is one of the most defensive asset classes available. People need a place to live regardless of economic conditions, and rental demand in Canada remains strong due to population growth and limited housing supply.
The fact that real estate investment trusts (REITs), especially CAPREIT, came under pressure in recent years when interest rates increased has created major opportunities for long-term investors who are looking to buy high-quality residential assets at discounted valuations.
In fact, right now, CAPREIT trades at a forward price-to-adjusted-funds-from-operations ratio of just 17.1 times, well below its 10-year average of 23.5 times.
A high-potential growth stock
One of the highest-potential TSX stocks to buy now that’s traded undervalued for years is WELL Health Technologies (TSX:WELL). However, the stock could surprise investors this year, with several catalysts that could spark a rally.
Healthcare is an essential industry with long-term demand driven by aging populations and the need for greater efficiency in medical systems. That gives WELL a ton of long-term potential, especially since it’s positioned itself at the intersection of healthcare delivery and technology, expanding both organically and through value-accretive acquisitions.
And with WELL planning to divest from non-core assets this year and spin out subsidiaries to unlock shareholder value, the stock has the potential to see a huge rally.
Therefore, with WELL still trading at a forward enterprise value to earnings before interest, taxes, depreciation and amortization ratio of just 8.1 times, below its five-year average of 12.9 times, it’s easily one of the best undervalued TSX stocks to buy now.
