The Canadian equity markets have witnessed strong buying momentum over the past few weeks, with the S&P/TSX Composite Index gaining 9.3% year to date. Optimism surrounding a potential peace agreement between the United States and Iran appears to have boosted investor sentiment, helping drive equity markets higher.
Despite this solid recovery, several quality stocks continue to trade at attractive valuations or remain well below their recent highs, creating compelling buying opportunities for long-term investors. Against this backdrop, here are three stocks that still look like excellent buys.
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Waste Connections
My first pick is Waste Connections (TSX: WCN), a leading provider of non-hazardous solid waste collection, transportation, and disposal services across secondary and exclusive markets in the United States and Canada. The stock has been under pressure over the last 12 months and currently trades about 22.7% below its 52-week high.
Softer recycled commodity prices, lower contributions from landfill-gas renewable energy credits, weaker waste volumes, and delays in reopening the Chiquita Canyon landfill have weighed on investors’ sentiments. However, the recent pullback has made the stock’s valuation more attractive, with its next-12-month price-to-earnings multiple declining to 26.9.
Meanwhile, Waste Connections continues to strengthen its long-term growth outlook through a combination of organic expansion and strategic acquisitions. After commissioning six renewable natural gas (RNG) facilities, the company plans to bring several additional facilities online by the end of this year. Supported by robust cash flows and a strong balance sheet, management also intends to maintain an active acquisition strategy, with multiple private-company opportunities currently in the pipeline.
Given its resilient business model, strong growth prospects, and discounted share price, I believe Waste Connections remains an attractive long-term investment opportunity.
Dollarama
My second pick is Dollarama (TSX: DOL), a leading discount retailer with 1,691 stores across Canada and 402 in Australia. The stock has faced pressure in recent months due to weaker-than-expected same-store sales growth, lower EBITDA (earnings before interest, taxes, depreciation, and amortization) margins following the acquisition and integration of The Reject Shop, and softer same-store sales guidance for fiscal 2027. As a result, the stock has declined approximately 17.8% from its 52-week high.
Despite these near-term challenges, Dollarama maintains an attractive long-term growth outlook. The retailer hopes to open 60–70 new stores annually, expanding its Canadian store network to 2,200 locations and its Australian footprint to 700 stores by the end of 2034. Supported by its capital-efficient business model, rapid sales ramp-up, short payback periods, and relatively low maintenance costs, these expansion initiatives could continue driving strong revenue and earnings growth over the long term.
In addition, I expect the contribution from its 60.1% stake in Dollarcity to increase steadily in the coming years. Dollarcity currently operates 732 discount stores across five Latin American countries and plans to expand its network to 1,050 stores by the end of 2031. Dollarama also has the option to increase its ownership stake in Dollarcity to 70% by the end of next year, which could further enhance its long-term growth prospects.
Alongside these expansion initiatives, Dollarama’s compelling value offerings should continue supporting healthy customer demand and same-store sales growth in the coming quarters. Given its strong business fundamentals and attractive long-term opportunities, I believe the recent pullback has created an appealing buying opportunity for long-term investors.
Northland Power
My final pick is Northland Power (TSX: NPI). Although the renewable energy developer has generated an impressive total shareholder return of 34.4% this year, the stock still trades at a reasonable next-12-month price-to-earnings multiple of 16.4, making it attractively valued relative to its long-term growth prospects.
Meanwhile, the accelerating global transition toward clean energy continues to create significant long-term opportunities for the company. To capitalize on this favourable trend, Northland Power plans to invest between $5.8 billion and $6.6 billion over the next five years to expand its renewable energy portfolio. Supported by these investments, management expects the company’s power-generation capacity to increase to 7 gigawatts by the end of the decade, representing an annualized growth rate of 16%.
In addition to expanding its operations, Northland Power is also focusing on improving efficiency and optimizing costs. Through these initiatives, the company expects to generate approximately $50 million in annualized savings beginning in 2028, thereby strengthening its earnings profile and supporting long-term profitability.
The company also pays a monthly dividend of $0.06 per share, currently yielding 3%. Given its highly contracted business model — with approximately 95% of revenue generated from long-term power purchase agreements (PPAs) — along with its strong growth prospects and attractive valuation, I believe Northland Power remains an excellent long-term investment opportunity at current levels.
