The Canadian equity markets have staged a strong recovery from their March lows, with the S&P/TSX Composite Index climbing more than 12%. Despite the broader market rally, several high-quality stocks remain well below their recent highs. For long-term investors, these pullbacks present attractive buying opportunities in the following two Canadian stocks, which offer resilient business models, strong growth prospects, and compelling valuations.
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Waste Connections
Waste Connections (TSX: WCN) is a leading waste management company that provides non-hazardous solid waste collection, transfer, and disposal services across the United States and Canada. By operating primarily in secondary and exclusive markets, the company faces limited competition, giving it strong pricing power and industry-leading margins.
However, the stock has come under pressure over the past 15 months due to lower waste volumes, weaker recycled commodity prices, reduced contributions from renewable energy credits, and delays in reopening the Chiquita Canyon landfill. As a result, Waste Connections shares have fallen more than 15% from their April 2025 highs.
Despite these near-term challenges, the company continues to invest in long-term growth through organic expansion and strategic acquisitions. After bringing six renewable natural gas (RNG) facilities into service, Waste Connections is constructing six more that could become operational by the end of this year. The company also maintains an active acquisition strategy, supported by robust cash flows and a strong balance sheet. It has an acquisition pipeline of private companies that collectively generate $5 billion in annual revenue.
In addition, Waste Connections is leveraging technology to improve efficiency and profitability by deploying robotics and optical sorters at its recycling facilities while expanding the use of business analytics, AI-powered productivity tools, and AI-driven pricing optimization. Given its essential services, resilient business model, multiple long-term growth drivers, and attractive valuation following the recent pullback, I believe Waste Connections is an excellent stock to buy today.
Dollarama
Another undervalued Canadian stock I am bullish on is Dollarama (TSX: DOL), a leading discount retailer with 1,719 stores in Canada and 410 in Australia. The stock has declined about 10% from its 52-week high in recent months as investors reacted to the lower-margin acquisition of Australia’s The Reject Shop, increased capital spending on a new Canadian distribution centre, and management’s softer-than-expected same-store sales outlook for fiscal 2027.
Despite these near-term concerns, the recent pullback presents an attractive buying opportunity for long-term investors. Dollarama’s direct-sourcing business model and efficient logistics network enable it to keep costs low and offer a broad assortment of everyday products at compelling prices. This value proposition supports resilient customer traffic and healthy same-store sales across varying economic conditions.
Looking ahead, Dollarama has multiple growth catalysts. The company plans to expand its Canadian and Australian store networks to 2,200 and 700 locations, respectively, by the end of fiscal 2034. It also owns a 60.1% stake in Dollarcity, which operates 752 stores across five Latin American countries and aims to grow its footprint to 1,100 stores by the end of fiscal 2031. In addition, Dollarama has the option to increase its ownership in Dollarcity to 70% by the end of 2027, which could further boost its share of the subsidiary’s earnings. Given its resilient business model, attractive long-term growth opportunities, and discounted valuation, I believe Dollarama is an excellent stock to buy today.
