The Canadian equity markets have staged an impressive rebound in recent weeks, with the S&P/TSX Composite Index climbing more than 10% from its March lows. However, despite this broader market recovery, several high-quality Canadian stocks continue to trade well below their 52-week highs, creating attractive opportunities for long-term investors.
For investors with a longer investment horizon, these discounted stocks offer a compelling combination of growth potential and value. Backed by solid fundamentals, strong business models, and a favourable long-term outlook, the following three Canadian stocks stand out as attractive buys at current levels.
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Dollarama
My first pick is Dollarama (TSX:DOL). The discount retailer’s stock is currently trading more than 15% below its 52-week high, pressured by softer-than-expected fourth-quarter same-store sales growth, lower EBITDA (earnings before interest, taxes, depreciation, and amortization) margins following the acquisition and integration of The Reject Shop, and management’s more conservative same-store sales growth outlook for fiscal 2027.
While these near-term headwinds have weighed on investor sentiment, Dollarama’s long-term growth story remains firmly intact. The company plans to open 60 to 70 new stores annually, expanding its Canadian store count to 2,200 locations and its Australian store count to 700 by the end of fiscal 2034. Given its capital-efficient business model, rapid sales ramp-up, attractive store-level economics, and relatively low maintenance costs, these expansion initiatives should support steady long-term revenue and earnings growth.
Dollarama also benefits from its international growth platform through its 60.1% ownership stake in Dollarcity, which currently operates 732 discount stores across five Latin American countries. Dollarcity aims to increase its store count to 1,050 by the end of fiscal 2031, while Dollarama retains the option to raise its ownership stake to 70%. As Dollarcity continues to expand, its contribution to Dollarama’s earnings could grow meaningfully in the years ahead.
Given its multiple growth drivers, proven execution track record, and discounted share price, I believe Dollarama offers an attractive buying opportunity for long-term investors.
Waste Connections
Another Canadian stock that appears undervalued at current levels 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 faced pressure in recent months due to softer recycled commodity prices, lower contributions from landfill-gas renewable energy credits, weaker waste volumes, and delays in reopening the Chiquita Canyon landfill. As a result, the shares currently trade roughly 17% below their 52-week high.
Despite these near-term challenges, Waste Connections continues to expand its business through a combination of organic expansion and strategic acquisitions. The company is developing several renewable natural gas (RNG) facilities, which could begin operations by the end of this year, creating an additional source of revenue and cash flow. At the same time, its strong balance sheet and healthy cash generation provide the financial flexibility to pursue acquisitions, a key component of its growth strategy. Management continues to see a robust pipeline of private-company acquisition opportunities that could further expand its market presence and earnings base.
Given the essential nature of waste management services, the company’s resilient business model, attractive growth opportunities, and discounted valuation, I believe Waste Connections represents a compelling buying opportunity for long-term investors.
Northland Power
My final pick is Northland Power (TSX:NPI), which develops, owns, and operates a diversified portfolio of energy infrastructure assets with a total power-generating capacity of approximately 3.5 gigawatts. While the stock has delivered an impressive 27.4% return this year, it still trades about 13.7% below its 52-week high, offering investors an opportunity to gain exposure to its long-term growth potential at a discounted valuation.
The global transition toward cleaner energy continues to create a favourable backdrop for Northland Power. To capitalize on this trend, the company plans to invest between $5.8 billion and $6.6 billion over the next five years, aiming to double its power-generation capacity to 7 gigawatts by the end of the decade. This expansion would represent an annualized capacity growth rate of roughly 16%, positioning the company to benefit from rising demand for renewable energy.
In addition to expanding its asset base, Northland Power is focused on improving operational efficiency and optimizing costs. Management expects these initiatives to generate approximately $50 million in annualized savings beginning in 2028, thereby enhancing profitability and strengthening the company’s earnings profile over time.
The company also pays a monthly dividend of $0.06 per share, yielding 3.2% at current prices. Given the supportive industry outlook, ambitious growth plans, ongoing efficiency initiatives, and attractive monthly dividend, I believe Northland Power remains a compelling long-term investment opportunity at current levels.
