No matter whether you’re looking to put your first $1,000 to work in the market, or just the next $1k, doesn’t really matter. The impetus of investing is to buy the best-quality companies at the best possible prices. That’s easier said than done, of course, with most market participants actively doing the same.
Thus, I’m of the view that discovering top undervalued stocks and doing plenty of research on these names can be helpful. Of the thousands of companies I’ve covered, these three Canadian value stocks stand out to me as prime buying opportunities right now.
Here’s why.
Source: Getty Images
Canadian Apartment REIT
In the world of Real Estate Investment Trusts, Canadian Apartment REIT (TSX:CAR.UN) is noteworthy.
If you’re looking for a bona‑fide “dirt‑cheap” Canadian stock that also pays a solid dividend, CAP REIT is one of the most compelling names on the TSX right now. This residential‑focused REIT owns a massive portfolio of apartments across Canada, anchored in high‑demand cities like Toronto, Vancouver, and Montreal. Over the past few years, higher interest rates have hammered REIT valuations, pushing CAP REIT into territory we haven’t seen in more than a decade on a price‑to‑AFFO (adjusted funds from operations) basis.
Right now, this stock trades at a reasonable multiple with a dividend yield north of 4%. I think investors gain some of the highest-quality exposure to real estate in the safest possible manner (while reaping strong income along the way). For those who don’t want to be a landlord but want exposure to the still-pricey real estate market at a discount, CAR.UN stock is the way I’d approach this problem.
Canadian National Railway
Another top classic cash cow many investors look to buy in times of distress, Canadian National Railway (TSX:CNR) is another top Canadian value stock I’ve been pounding the table on of late.
If you’d rather own a classic, cash‑flowing infrastructure business instead of a REIT, Canadian National Railway is a name I’d tell you to seriously consider with your first $1,000. Indeed, Canadian National has been one of the most profitable and efficient railways in North America for years. That’s thanks to its coast‑to‑coast network and a business model that has a naturally inflation‑resistant business model.
Recently, however, CNR has also been one of the most oversold large‑cap stocks on the TSX. This drop has been due, in part, to ongoing market fears around tariffs, slower growth, and broader rail‑sector headwinds. That sentiment has dragged the share price down significantly from its all‑time highs, creating a rare window to buy a high‑quality transportation giant at a much lower price of admission.
If you’re prepared to hold for the next several years, reinvesting dividends and letting the company’s organic growth and strategic acquisitions play out, CNR can quietly become a core position in almost any Canadian‑focused portfolio.
Alimentation Couche-Tard
Now, we close out this list with one of my personal favourite Canadian value stocks in Alimentation Couche-Tard (TSX:ATD).
Shares of ATD stock now trade at around $80 per share, which is right around the level they traded at when this stock hit its previous all-time high in early 2024.
That’s saying something for a company that’s grown considerably since then and still has one of the most defensive business models in the market. This leading gas station and convenience store operator has done an excellent job of consolidating this otherwise fragmented sector, adding new family-run chains into the fold to grow its overall footprint and expand market share.
With more commuting taking place with return to work orders and plenty of road travel expected (given the surge in ticket prices of late), investing in your local convenience store and gas station chain makes sense. And with global expansion efforts, this is a defensive stock I think could garner a global following.
