The 2 Best TSX Stocks to Buy Before They Recover

Two underperforming but high-quality stocks are poised for a strong recovery once the market stabilizes.

Key Points
  • Mid‑April 2026: the TSX shows resilience (+7.7% YTD) with many buying opportunities—TELUS and Propel are top underperforming TSX picks to buy ahead of the next market leg up.
  • TELUS (TSX:T) trades at $16.90 with a 9.97% yield, has paused dividend growth (not cut), is prioritizing debt reduction and FCF growth (FCF +11% in 2025) but faces risk if leverage targets aren’t met.
  • Propel Holdings (TSX:PRL) is a TSX30 alum with huge multi‑year gains yet is -11.5% YTD, yields 3.71%, and aims to scale via FreshLine and up to US$150M in U.S. funding toward $1.1B revenue and $163.9M earnings by 2028.

The TSX continues to display powerful resilience amid heightened volatility. As of mid-April 2026, the index has climbed 7.7% year-to-date, with eight of 11 primary sectors now in positive territory. Buying opportunities are plenty, too, as many underperforming but high-quality stocks have clear paths to rise.

TELUS (TSX: T) and Propel Holdings (TSX: PRL) belong in the underperforming bunch, but both stand out as the best TSX stocks to buy before the next leg of the market recovery gets underway.

investor schemes to buy stocks before market notices them

Source: Getty Images

New dividend policy

TELUS has yet to fully recover from its 2024 slump. At $16.90 per share, the year-to-date loss is 4.4% following a nearly 9% slide in the last three months. The 9.97% dividend yield offsets the weakness, though some investors fear a dividend cut. On December 3, 2025, Canada’s second-largest telecommunications company announced a pause to its dividend-growth program, not a dividend cut.

The $26.4 billion will likewise step down its 2% Discounted Dividend-Reinvestment Plan (DDRIP) until the discount reaches zero in 2028. Net debt reduction is also part of the plan. The full-year 2025 financial results showed a 1% and 12% year-over-year increase in operating revenue and net income, respectively.

Notably, free cash flow (FCF) rose 11% to $2.2 billion compared to 2024. Its president and CEO, Darren Entwistle, said, “TELUS is advancing its capital allocation strategy, supported by strong business fundamentals and significant free cash flow generation.”

Entwistle expressed confidence that the strong financial momentum will enable TELUS to deliver FCF growth of at least 10% compounded annual growth rate through 2028. The telco reduced its leverage ratio to 3.4 times in 2025 and aims to reduce it further to three times by 2027.

Many believe that a dividend cut will follow the pause in semi-annual dividend increases. It could be a looming reality that significantly reduces capital costs and provides financial flexibility. Still, management will maintain its current quarterly dividend while it works to strengthen the balance sheet. Dividend growth will resume once it meets leverage targets.

TSX30 winner

Propel Holdings, an $854.2 million financial technology company, extends credit to underserved customers through its AI-powered online lending platform. The financial stock placed 6th in the 2025 TSX30 List, the flagship program for TSX’s 30 top-performing stocks. The ranking is based on the dividend-adjusted share price performance over a three-year period. It was +560% for PRL.

The current share price of $21.84 represents an 11.5% year-to-date loss. However, if you invest today, you can feast on the 3.71% dividend (38% payout ratio). In 2025, revenue and net income increased 31% and 28%, respectively, to US$589.8 million and US$59.5 million.

However, in Q4 2025, net income fell 49% to US$5.9 million versus Q4 2024, while provision for credit losses (PCLs) rose to 56% of revenues from 48% a year ago. Both factors caused the price decline.

The growth prospect stems from the official launch of FreshLine, an unsecured personal line-of-credit product, in March 2026. In addition, funding partners have committed up to US$150 million to fund a nationwide U.S. rollout. Propel Holdings projects $1.1 billion in revenue and $163.9 million in earnings by 2028.

Earn in two ways

Secure your positions in TELUS and Propel Holdings now before the strong rebound. Once the market stabilizes, prospective investors will have a dual path to profitability: price appreciation and dividends.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Propel. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Middle aged man drinks coffee
Dividend Stocks

TFSA or RRSP? Your Tax Rate Could Change the Answer

Your current and future tax rates can help determine whether a TFSA or RRSP deserves your next retirement contribution.

Read more »

dividend stocks are a good way to earn passive income
Dividend Stocks

How I’d Structure My TFSA With $14,000 for Constant Income

I would split $14,000 across three stocks for income.

Read more »

oil pump jack under night sky
Dividend Stocks

Forget GICs: This Dividend Stock Pays You 4% Monthly

GIC rates look thin after taxes. This top Canadian dividend stock pays you each month, yields about 4%, and covers…

Read more »

infrastructure like highways enables economic growth
Dividend Stocks

3 Savvy Ways Canadians Can Invest in the Country’s Infrastructure Boom

Find out how Prime Minister Carney's plans for Canadian infrastructure can benefit investors and revitalize key industries.

Read more »

ways to boost income
Dividend Stocks

$10,000 in These Stocks Could Be All It Takes to Build Real Monthly Income

A $10,000 investment split between two monthly-paying Canadian REITs could currently generate about $50 in passive income every month.

Read more »

Concept of rent, search, purchase real estate, REIT
Dividend Stocks

Looking for TFSA Income? This 7.6% Dividend Stock Should Snag Your Attention

Firm Capital Property Trust's monthly distribution recently showed improved safety. Here's why the 7.6% yield belongs in your TFSA.

Read more »

A plant grows from coins.
Dividend Stocks

Are These Still the Best Dividend Stocks in Canada?

With GICs yielding over 4% and their business models shifting, are BCE, Enbridge, and TD Bank still among Canada's top…

Read more »

shopper carries paper bags with purchases
Dividend Stocks

$1,000 in This Stock Could Be Paying You for the Rest of Your Life

A $1,000 investment won't create instant passive income, but Fortis's 52-year dividend-growth streak gives it decades-long potential.

Read more »