While dividend investing could be rewarding for long-term investors, I get even more interested when a quality stock’s yield rises because its share price has temporarily fallen.  That’s exactly what seems to be happening with Cogeco Communications (TSX: CCA) right now. CCA stock is currently hovering near its 52-week low. While there are some reasons for investors to become cautious, especially around the company’s U.S. operations, I don’t think Cogeco has completely lost its investment appeal. That’s because its Canadian business continues to perform relatively well, free cash flow is improving, and shareholders recently received another dividend increase.

In this article, I’ll explain why Cogeco’s solid yield and improving financial trends could make this beaten-down telecom stock an appealing buy near its 52-week low on the TSX today.

What’s going on with Cogeco stock?

As a telecom company, Cogeco provides Internet, wireless, video, and wireline phone services to residential and business customers across Canada and the United States. Its services are offered under the Cogeco and oxio brands in Canada and Breezeline and welo in the U.S.

CCA stock has fallen 18% over the last six months. That decline has left the stock 23% below its 52-week high and only 2% above its 52-week low. As a result, its shares currently trade at $59.51 apiece with a market cap of $2.5 billion. At today’s price, Cogeco also offers an attractive 6.6% annualized dividend yield.

Of course, there are reasons behind the recent weakness. For example, competition is continuing to intensify in the U.S. market, which has led to a 10% year-over-year (YoY) decline in Cogeco’s American telecom revenue in the latest quarter. Other factors like a smaller subscriber base, a shift toward Internet-only services, and competitive pricing also hurt its sales in the region.

The numbers are not all weak

Even with those challenges in the U.S. market, Cogeco’s financials remain stable, which makes me believe CCA stock deserves a closer look at its current price. In the third quarter of its fiscal year 2026 (ended in May), the telecom firm’s consolidated revenue slipped 4.7% YoY to about $697 million. Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) also declined 3% due to lower revenue from the U.S. business. Still, the company’s adjusted EBITDA margin improved to 50.5% from 49.6% as cost reductions and operating efficiencies helped cushion the weakness.

More importantly, its Canadian business continued to perform well. Last quarter, its Canadian telecom revenue improved on a YoY basis to about $377 million with the help of high-speed Internet customer additions over the last year. Meanwhile, the segment’s adjusted EBITDA rose 3.9% to roughly $204 million.

Cogeco posted a $1.7 billion loss for the quarter, which may look alarming at first glance. However, that figure included a $2.2 billion non-cash impairment charge related to its U.S. business. Excluding these impairment charges and certain other items, the company’s adjusted profit attributable to shareholders climbed nearly 29% YoY to nearly $100 million.

Adding to the optimism, its free cash flow in the latest quarter surged by 17.6% YoY. Lower financial expenses and lower acquisition, integration, restructuring, and other costs helped drive that improvement.

Why the 6.6% yield deserves attention

For a fundamentally strong dividend stock sitting near its 52-week low, Cogeco’s growing payout and efforts to improve the business increase its investment appeal further.

In July, the company raised its quarterly dividend by 7% YoY to $0.987 per share. At the same time, the firm’s wireless sales remained ahead of plan. In the U.S., Ohio delivered a fourth consecutive quarter of positive Internet subscriber growth. Similarly, Cogeco also expanded its welo digital brand across its entire Ohio footprint.

On top of that, Cogeco plans to optimize capital investments next fiscal year to support free cash flow generation.

While Cogeco still has work to do as competitive pressure weighs on its U.S. operations, a 6.6% dividend yield, improving Canadian profitability, stronger free cash flow, and a share price near its 52-week low make CCA stock an attractive income stock for patient long-term investors.

The post Here’s a 6.6% Dividend Stock Trading Near a 52-Week Low appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends Cogeco Communications. The Motley Fool has a disclosure policy.

The TSX has had a surprisingly strong run in 2026, especially considering how much uncertainty investors have had to digest. From the U.S.-Iran war and Canada-U.S. trade tensions to lingering questions about the economy and interest rates, there has been no shortage of reasons for markets to stumble. Yet Canadian stocks have continued pushing higher. That makes finding genuine discounts a little harder — but certainly not impossible.

Even in a rising market, individual companies could sometimes fall out of favour while their underlying businesses continue moving in the right direction. Those are exactly the situations I love to wait for.

In this article, I’ll highlight two of the best TSX stocks and explain why their discounted share prices could offer attractive opportunities.

OpenText stock

Let’s start with OpenText (TSX: OTEX), a discounted TSX stock that looks interesting after a steep pullback, especially as its cloud business and profitability continue to improve.

This Waterloo-based information management software firm helps organizations manage, secure, and use enterprise data through cloud, cybersecurity, analytics, and other software solutions. OTEX stock currently trades at $33.15 per share with a market cap of $8 billion. At this market price, it has a 4.7% annualized dividend yield.

OpenText shares are down 26% year-to-date and 27% over the last year. That weakness has pushed the stock about 40% below its 52-week high, creating a sizeable discount for investors willing to look beyond recent price performance.

More importantly, the company’s latest results showed encouraging business momentum. In the fourth quarter of its fiscal 2026 (ended in June), OpenText’s total revenue rose 2.9% year-over-year (YoY) to US$1.4 billion. Its cloud revenue climbed 6% to US$503 million, while enterprise cloud bookings jumped 24.1% to US$295 million.

Similarly, OpenText’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) surged more than 14% YoY, with its margin reaching 37.6%.

For the full fiscal year, the tech firm’s free cash flow grew 17.5% YoY to US$808 million. OpenText also returned a record US$677 million to shareholders through dividends and share repurchases. Its fiscal 2027 priorities include expanding sales capacity, strengthening its ecosystem partnerships, and increasing investment in its core portfolio around cloud, security, and artificial intelligence (AI).

Improving cloud bookings, solid cash generation, and a stock sitting far below its 52-week high make OpenText an attractive discounted TSX stock to consider right now.

TFI International stock

Another discounted TSX stock worth considering is TFI International (TSX: TFII), where a recent share-price pullback comes along with strong earnings growth across its businesses.

This Saint-Laurent-headquartered transportation and logistics firm operates Less-than-truckload, truckload, and logistics businesses across Canada, the United States, and Mexico. At the time of writing, TFII stock traded at $177.57 per share with a market cap of roughly $15 billion and a 1.5% annualized dividend yield.

Although TFI shares are up 25% year-to-date, they have fallen 18% over the past three months. That pullback has left TFII stock 24% below its 52-week high.

But this pullback doesn’t mean that its financials are weakening. In the second quarter, TFI’s total revenue rose 12% YoY to US$2.3 billion with the help of business acquisitions and improving market conditions. Its operating profit also surged 29% to US$220 million, driven mainly by higher revenue, better margins, and contributions from acquisitions.

At the same time, the transportation giant’s net profit jumped 39% YoY to US$136 million. Its Truckload segment was especially strong, with operating income surging 50%.

TFI’s second-quarter free cash flow climbed 11% YoY to US$202 million, supporting its ability to strengthen the balance sheet, invest in freight opportunities, and return excess capital to shareholders.

With profits improving across business segments and the shares still trading well below their 52-week high, TFI International looks like another attractive discounted TSX stock for long-term investors.

The post The Best Discounted TSX Stocks to Snap Up Now appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has positions in Open Text. The Motley Fool recommends TFI International. The Motley Fool has a disclosure policy.

Telus (TSX: T) may not look like an obvious bargain after falling 41% over the past year to $13.41, but that’s exactly what makes the shares of this Canadian telecom giant interesting right now. Investors are understandably cautious after its disappointing second-quarter results, reduced 2026 guidance, and a 55% dividend reset. However, that lower dividend should save Telus roughly $2.7 billion through 2028, giving the company greater flexibility to reduce debt and strengthen its balance sheet. And even after the reset, the shares still offer an annualized yield of about 5.6%.

Here’s why Telus could be an attractive buying opportunity on the TSX today while investor sentiment remains subdued.

Telus stock

After falling sharply over the last year, Telus stock currently trades at $13.41 per share with a market cap of about $21.3 billion. With this, the stock is now just 4% above its 52-week low. Despite its recent dividend reset, Telus still offers an annualized yield of roughly 5.6% at the current market price.

Of course, investors did not push the stock down this far without reason, as Telus has been facing aggressive promotional pricing in wireless, while slower population growth has weakened its subscriber demand. Pressure at Telus Digital and elevated leverage have added to investors’ concerns.

Its latest financial results clearly reflected some of those challenges. In the second quarter, Telus’s operating revenue and other income fell 3% year over year (YoY) to about $4.9 billion. Consolidated service revenue slipped 1%, mainly due to weaker Telus Digital revenue, lower mobile average revenue per user, and declining legacy voice revenue.

Similarly, its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) dropped by 2% YoY to about $1.8 billion.

However, not everything moved in the wrong direction for Telus in the latest quarter, as it generated about $1.3 billion in cash from operating activities, up 15% YoY. The company’s free cash flow also climbed 2% from a year ago to $545 million. On top of that, its telecom subscriber base grew 6% over the previous 12 months to 17.9 million connections.

Why the selloff could create an opportunity

For investors willing to look past Telus’s near-term challenges, its balance-sheet strategy makes this beaten-down stock attractive.

Reducing leverage is now one of the company’s biggest priorities. Telus ended the second quarter with a net debt-to-adjusted EBITDA ratio of 3.5 times. And the telecom giant wants to bring that figure down to roughly three times or lower by the end of 2028.

Moreover, Telus’s controversial dividend reset should help it get there. If you don’t know it already, the company recently reduced its quarterly dividend by 55% to $0.1875 per share, bringing the annualized payout to $0.75. While that is painful for existing income investors, the company expects the change to generate about $2.7 billion in cumulative cash savings through 2028. Those savings are expected to go toward debt reduction.

That is not the only step Telus is taking. The company is also reviewing non-core assets, including Telus Health-related assets and real estate, with proceeds from potential monetizations also intended for deleveraging. At the same time, Telus expects capital intensity to decline over the multi-year horizon as its PureFibre network build approaches completion.

Still, investors should keep their expectations realistic as Telus recently lowered its 2026 free cash flow guidance to about $1.8 billion and now expects adjusted EBITDA to decline between 2% and 4%. Simply put, this is unlikely to be an overnight turnaround.

But Telus’s 41% decline has already reflected plenty of that pessimism. If the company can consistently reduce leverage, improve fundamentals, grow free cash flow, and keep its core wireless and fibre businesses strong, it can see a handsome recovery in the years to come.

The post Down 41% and Still Yielding 5.6%: 1 Canadian Stock I’d Snap Up appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

When I hunt for undervalued stocks, I don’t necessarily look for a low share price alone. Instead, I try to understand why the market has turned pessimistic and, more importantly, what could cause that pessimism to fade. That’s why I believe the catalyst matters just as much as the discount.

Two top Canadian stocks currently fit that description really well right now. Their stocks have suffered big declines lately, but both businesses are taking steps that could produce significantly better results over time. Let’s take a closer look at these beaten-down stocks that could be ready for a powerful rebound.

OpenText stock

The first beaten-down Canadian stock worth a closer look is OpenText (TSX: OTEX), especially after its latest results showed encouraging progress despite its weak share-price performance.

In short, this Waterloo-based information management software firm helps organizations manage, secure, and use data through cloud, cybersecurity, analytics, and artificial intelligence (AI) solutions. After falling nearly 24% over the last year, OTEX stock now trades at $34.58 per share with a market cap of $8.4 billion. Interestingly, this tech stock also rewards investors with attractive dividends, with its yield currently hovering close to 4.5%.

In the fourth quarter of its fiscal year 2026 (ended in June), OpenText’s revenue rose 2.9% year-over-year (YoY) to US$1.4 billion. Its cloud revenue climbed 6% from a year ago to US$503 million, while enterprise cloud bookings jumped 24.1% to US$295 million.

Its profitability improved even faster as the tech firm’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) surged 14.1% YoY to US$507 million, with its margin reaching 37.6%.

Notably, OpenText is increasing investment in cloud, security, and AI while expanding its sales capacity and partner ecosystem. The company is also focused on reducing debt and has renewed a share repurchase plan. These positive factors give me strong reasons to believe that this undervalued Canadian stock could see a strong rebound soon.

ATS stock

For investors willing to take on more turnaround risk in exchange for stronger upside potential, ATS (TSX: ATS) could be another great beaten-down stock worth watching.

This Cambridge-based business provides advanced automation systems and services to customers across life sciences, industrial and consumer markets, food and beverage, and energy. After declining 30% over the last year, ATS stock currently trades at $26.72 per share and has a market cap of $2.6 billion.

Its latest results explain some of that weakness. In the first quarter of its fiscal year 2027 (ended in June), ATS’s sales fell 5.8% YoY to $694 million. The decline mainly reflected a 6.4% drop in organic revenue and lower construction-contract revenue as ATS entered the quarter with a smaller order backlog.

Still, there were some encouraging signs as ATS’s services revenue grew 11.4% from a year ago, while energy revenue surged 68.9% as a higher opening backlog supported nuclear project execution. The business also finished the quarter with about $1.9 billion in order backlog.

Interestingly, ATS has launched an 18-month Fixed Cost Transformation Program designed to simplify operations, lower fixed costs, and improve returns. Its initial European phase is expected to reduce annual costs by about $20 million. The broader program is expected to deliver roughly half the margin expansion required for ATS to reach its long-term 15% adjusted earnings from operations margin target.

With ATS shares currently trading near the bottom of their 52-week range, successful cost reductions and stronger order momentum could give its stock plenty of room to recover.

The post 2 Undervalued Canadian Stocks Ready to Explode Higher appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has positions in Open Text. The Motley Fool recommends ATS Corp. The Motley Fool has a disclosure policy.

Watching a stock lose nearly a third of its value in a year is enough to make almost any investor uncomfortable. But a falling stock price does not always mean the underlying business is getting weaker. Sometimes, the market turns cautious even as a company keeps growing revenue, improving profitability, and building a stronger pipeline of future work.

That seems to be the case with WSP Global (TSX: WSP) right now. Its shares remain well below their 52-week high, yet the engineering and infrastructure firm just reported accelerating organic growth, a record backlog, and stronger adjusted earnings. The firm also became more confident about its 2026 outlook after a solid first half.

In this article, I’ll explain why WSP stock’s recent decline shouldn’t worry you much and why this Canadian growth stock still looks worth buying for the long term.

WSP stock

If you don’t know it already, WSP provides engineering, advisory, design, and infrastructure services across areas such as transportation, buildings, environment, and energy. Its shares currently trade at $192.56 per share, giving the company a market cap of about $26 billion. The stock also offers a 0.8% annualized dividend yield.

Over the last year, WSP stock has fallen roughly 32%. Even so, some momentum has returned recently as the shares have climbed 12.4% so far in August.

That rebound alone is not why I’m staying optimistic. The more important point is that WSP’s operating performance looks far stronger than its one-year stock performance suggests.

Strong growth despite the weak share price

The company’s second-quarter numbers make the recent stock weakness much easier to look past. During the quarter, WSP’s revenue rose 20% year over year (YoY) to $5.4 billion, while net revenue climbed 23% to $4.3 billion. Its organic net revenue growth also accelerated to 5%, supported by growth across all of the company’s reportable segments.

On the profitability side, WSP’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped 28.8% YoY in the latest quarter to $815 million. That figure exceeded the high end of management’s quarterly outlook range.

Similarly, its adjusted EBITDA margin expanded by 90 basis points from a year ago to 19.1% with the help of higher productivity in the United States and Canada, along with lower optimization and right-sizing costs. As a result, the business posted a 26.7% YoY increase in its adjusted net profit to $388.6 million.

Why the long-term growth story still looks attractive

For me, WSP’s record backlog is one of the strongest reasons not to panic over its stock’s decline. The company ended the second quarter with a record $20.1 billion backlog, up 23.2% YoY. Its organic backlog growth reached 5.7% over the previous 12 months, its strongest performance on that front since 2022. The backlog represented about 11.6 months of revenue, giving WSP meaningful visibility into future growth prospects.

In addition, WSP’s recently acquired TRC business is adding another growth driver. TRC’s Power & Energy operations delivered double-digit net revenue growth compared with the corresponding pre-acquisition period, and WSP said the integration remains on track. Encouraged by strong results, the company also raised the lower end of its 2026 net revenue and adjusted EBITDA guidance.

Given all these positive factors, WSP’s business appears to be moving in a much healthier direction than its stock chart suggests. A record backlog, stronger margins, rising adjusted earnings, and improved confidence in the 2026 outlook give me little reason to view its 32% one-year decline as a sign that the long-term growth story has broken down. For patient investors, that disconnect makes WSP stock look undervalued.

The post Why I’m Not Worried About This Canadian Stock’s 32% Drop appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends WSP Global. The Motley Fool has a disclosure policy.

Dividend investing becomes much more rewarding if you can buy a good business when it falls out of favour with the market, making it look undervalued. In addition, a weaker share price can lift the dividend yield and create a better entry point if the company’s underlying business still looks healthy.

In this article, I’ll highlight two undervalued dividend stocks in Canada that offer attractive yields and have business trends that could support stronger long-term returns.

OpenText stock

OpenText (TSX: OTEX) could be an attractive beaten-down Canadian dividend stock today whose recent operating performance looks much stronger than its share price suggests.

The Waterloo-based technology firm provides information management software and services to businesses, governments, and other organizations. OTEX stock is down 19% year to date and sits about 36% below its 52-week high. With this, it currently trades at $36.02 per share with a market cap of $8.7 billion. At this market price, it offers a 4.3% annualized dividend yield.

That share-price weakness contrasts with OpenText’s strong financials. In the fourth quarter of its fiscal year 2026 (ended in June), the company’s revenue inched up 2.9% year over year (YoY) to US$1.4 billion. Cloud revenue climbed 6% YoY to US$503 million, marking another quarter of organic cloud growth, while its enterprise cloud bookings jumped over 24%.

Its profitability in the latest quarter improved at an even faster pace, with the company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) surging 14.1% YoY to US$506.7 million. The business also generated US$185.8 million in operating cash flow during the quarter, up 17.5% from a year ago.

Adding to the optimism, OpenText is now focusing on more investment in artificial intelligence (AI), cloud, security, sales capacity, and ecosystem partnerships.

With solid cash generation, improving cloud momentum, and the stock trading well below its 52-week high, OTEX looks like an attractive combination of value and dividend income right now.

Cogeco Communications stock

For investors looking for an even higher yield, Cogeco Communications (TSX: CCA) offers another undervalued dividend opportunity.

In short, this Montréal-based company provides internet, video, wireless, and wireline phone services across Canada and the United States. CCA stock is currently off 22% from its 52-week high, trading at $60.73 per share with a market cap of $2.6 billion. The stock now offers a strong 6.6% annualized dividend yield.

In the third quarter of its fiscal year 2026 (ended in May), Cogeco’s revenue fell 4.5% YoY to $724.2 million as weakness in the American telecommunications business outweighed growth in Canada. The company’s adjusted EBITDA also slipped 2.9% from a year ago, again reflecting pressure from the U.S. operations.

The Canadian business, however, continued to move in the right direction as Cogeco’s Canadian revenue showed YoY improvement, while adjusted EBITDA in the segment also climbed 3.9%. More importantly, the firm’s adjusted profit attributable to owners climbed 29.2%, and adjusted earnings rose to $3.10 per share.

During the quarter, the business generated $170.7 million in free cash flow, up 15.7% YoY, helped mainly by lower financial expenses and lower acquisition, integration, restructuring, and other costs. Encouraged by these results, Cogeco raised its quarterly dividend by 7% to $0.987 per share.

Although the company is trying to win its place in the U.S. amid intense competition, its Canadian operations remain resilient, wireless sales continue to grow, and management is working to improve efficiency and optimize capital spending.

With a 6.6% dividend yield and a stock price still under pressure, CCA could be an attractive income stock for investors willing to wait for a broader recovery.

The post The Best Undervalued Dividend Stocks in Canada Today appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has positions in Open Text. The Motley Fool recommends Cogeco Communications. The Motley Fool has a disclosure policy.

Some of the most interesting investment opportunities appear before a stock becomes widely popular. A weak share price or a period of business transition can cause investors to overlook a company even when its underlying operations are improving. However, that disconnect creates an attractive entry point for patient Foolish investors.

Here are three TSX stocks with strong financial trends and long-term growth drivers that look undervalued based on their long-term growth prospects.

Opentext stock

The first stock that looks undervalued before the crowd catches on is OpenText (TSX: OTEX). This Canadian technology firm helps businesses manage, protect, and analyze their data.

OpenText stock currently trades at $34.97 per share with a market cap of $8.5 billion. It also rewards investors with a 4.6% annualized dividend yield. Despite its stable financial growth trends, OTEX stock is down about 22% in 2026, making it look cheap.

In the third quarter of its fiscal year 2026 (ended in March), the company’s cloud revenue rose 6.6% year-over-year (YoY) to US$493 million as demand continued for its cloud-based data management and enterprise artificial intelligence (AI) offerings. As a result, its total revenue grew 2.2% YoY to about US$1.3 billion.

On the profitability side, OpenText’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped 10.8% YoY to US$438 million.

OpenText has now delivered cloud growth for 21 consecutive quarters. A new chief executive officer is now leading the business as it continues investing in cloud services and enterprise AI.

For investors willing to look past the recent share-price decline, OpenText offers a mix of income, improving profits, and long-term technology growth.

MDA Space stock

Another stock that may not be fully priced for its long-term potential is MDA Space (TSX: MDA). It builds satellites, robotics systems, and geointelligence technology.

Its shares trade at $42.26 apiece, and the company has a market cap of $6.8 billion. The stock has already gained 59% in 2026, but remains nearly 36% down from its 52-week high despite its expanding business.

In the first quarter, MDA’s revenue jumped 32.2% YoY to about $464 million, backed by higher work volumes across all three business areas. At the same time, its adjusted EBITDA rose 32.1% to about $91 million.

Notably, the company’s long-term growth prospects are backed by a $3.7 billion backlog and a broader opportunity pipeline valued at about $40 billion.

Although the stock has already performed well this year, the company’s solid backlog, contract wins, and expanding market reach give it several ways to keep growing. That makes MDA Space an appealing name for long-term investors, especially as it currently trades well below its 52-week high.

B2Gold stock

B2Gold (TSX: BTO) rounds out this list with strong cash flow, global gold production, and direct shareholder returns. The Vancouver-based miner operates in Canada, Mali, Namibia, and the Philippines.

BTO stock trades at $5.43 per share and carries a market cap of $7.2 billion. It also offers a 2% annualized dividend yield. Even with strong gold prices, BTO shares remain down roughly 12% this year.

The company produced 237,763 ounces of gold in the first quarter as each of its operating mines exceeded management’s production expectations. As a result, its revenue more than doubled to about US$1.2 billion from US$532.1 million a year ago.

For the quarter, the gold producer generated US$361.8 million in free cash flow, compared with negative free cash flow in the same quarter last year.

B2Gold has several development and exploration projects underway, giving it potential sources of future production growth. Combined with its stronger balance sheet and shareholder returns, those projects make BTO stock an attractive option for investors seeking an overlooked gold producer with improving fundamentals.

The post 3 Undervalued Stocks to Buy Before the Crowd Catches On appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has positions in MDA Space and Open Text. The Motley Fool recommends B2Gold and MDA Space. The Motley Fool has a disclosure policy.

Buying a stock after it has fallen requires a different mindset than buying one that’s making new highs. Instead of chasing momentum, you’re actually asking a much harder question: has the market correctly priced the risks, or has it become too pessimistic about the company’s future?

That distinction matters because some stocks deserve lower valuations than they already have, while others continue making consistent financial progress even as investor sentiment deteriorates. Open Text (TSX: OTEX) falls into the second category in my opinion. The stock has spent the past year navigating slower technology spending and changing investor expectations, yet it continues to generate strong free cash flow, grow its cloud business, and return capital to shareholders through dividends and buybacks. That’s not what you’d expect from a business in decline.

Let’s look at why Open Text remains a top Canadian dividend stock I’d be comfortable buying after its recent pullback and holding for the long term.

A top Canadian dividend stock with AI exposure

To give you a little background, Open Text is a Waterloo-based information management firm that provides software and services for global enterprises, small and medium-sized businesses, and governments. Its platform helps organizations manage content, cybersecurity, business networks, information technology operations, analytics, and the data needed for artificial intelligence (AI) workflows.

Although OTEX stock has gained nearly 5% over the last three months, it remains 44% below its 52-week high. As a result, it now trades at $31.39 per share and carries a market cap of $7.6 billion.

Open Text is one of the few Canadian technology stocks that combines enterprise software growth with a reliable dividend, as it currently yields about 4.9%.

Recent results point to durable demand

Note that Open Text reports its earnings in U.S. dollars, and its third-quarter fiscal 2026 (ended in March) results showed that demand for its services has not disappeared. The tech firm’s total quarterly revenue rose 2.2% year-over-year (YoY) to US$1.3 billion. Its cloud revenue jumped by 6.6% YoY to US$493 million, marking the company’s 21st consecutive quarter of organic cloud growth.

On the profitability side, Open Text delivered a strong 13% net profit margin and an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of 34%. It generated US$355 million in operating cash flow and US$305 million in free cash flow during the quarter.

Why long-term investors may look past the dip

In addition to its strong financials, Open Text is also positioning itself around several long-term technology trends. The company plans to invest around US$120 million in Ireland over three years. Interestingly, these investments are linked to agentic AI, cybersecurity, cloud, and digital operations capabilities.

At the same time, its US$150 million divestiture of Vertica, a non-core structured data analytics platform, should help Open Text concentrate more capital and attention on its core businesses.

Given its large customer base, positive AI momentum, strong margins, meaningful free cash flow, and a nearly 5% dividend yield, I find this undervalued dividend stock really attractive to buy on the dip, especially for patient investors.

The post 1 Canadian Dividend Stock Down 44% to Buy and Hold Forever appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has positions in Open Text. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Finding growth stocks after they’ve already doubled or tripled might not offer the best risk-reward opportunity for investors. Instead, finding them after a major pullback can give you far more attractive opportunities. When a company’s long-term outlook remains intact but its share price moves sharply lower due to temporary challenges, Foolish investors get a chance to buy a quality business at a discount.

One Canadian growth stock that appears to fit that description right now is Pet Valu Holdings (TSX: PET). The company operates in a consumer market that has historically remained resilient through economic cycles, while continuing to benefit from strong customer loyalty and recurring demand. Although Pet Valu stock has struggled over the last year, its underlying business continues expanding through store growth, premium product offerings, and digital investments.

In this article, I’ll explain why this growth stock could be worth buying aggressively after its recent decline.

Why Pet Valu stock stands out

If you don’t know it already, Pet Valu is a specialty retailer of pet food, pet supplies, and pet-related products. This Markham-based firm runs more than 850 corporate-owned and franchised stores across the country under banners including Pet Valu, Bosley’s by Pet Valu, Total Pet, and Tisol Pet Nutrition & Supply.

Its product lineup includes items like premium pet food and treats, accessories, health products, and aquariums.

At the time of writing, Pet Valu stock traded at $18.69 per share with a market cap of roughly $1.3 billion. Although the stock has recovered by nearly 8% over the last 10 sessions, it’s still down nearly 52% from its 52-week high, making it look undervalued to buy right now based on its long-term growth prospects.

Revenue growth continues despite temporary margin pressures

Pet Valu’s stock may be under pressure, but its latest numbers show the business is still growing. In the first quarter of 2026, the company’s revenue rose 3.2% year-over-year (YoY) to $287.9 million, while its system-wide sales climbed 2.5% to $375.2 million. That’s not explosive growth, but it does show that demand for pet products remains stable even in a tougher consumer environment.

However, Pet Valu’s adjusted net profit dropped by 14.8% YoY to $21.6 million last quarter. Still, this doesn’t look like a broken business. The company opened eight new stores and ended the quarter with 870 stores across its network.

The pet products retailer also generated $13.1 million in free cash flow and declared a quarterly dividend of $0.13 per share, giving investors some income from its 2.8% dividend yield while they wait for a recovery.

What could drive recovery?

One of Pet Valu’s biggest growth drivers remains its store network. The company now expects to open about 40 new stores in 2026, which should support its revenue growth even if its same-store sales remain modest in the near term.

The company’s updated 2026 outlook calls for revenue growth of 2% to 4% on a comparable 52-week basis. It also expects an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of about 21%, showing that its management still sees room to protect profitability despite value-seeking consumer behaviour and higher fuel costs.

Moreover, Pet Valu is also reinvesting in the business. It plans around $35 million of business reinvestment this year, including net capital expenditures and transformation costs. These investments mainly focus on improving areas such as technology, e-commerce, omni-channel capabilities, and supply chain efficiency.

Foolish bottom line

Pet Valu’s latest quarter wasn’t perfect, but it also wasn’t alarming enough to ignore the stock’s long-term potential. Its revenue is still growing, the store base continues expanding, and the company expects more new locations in 2026.

For investors willing to look beyond near-term margin pressure, the recent pullback in PET stock could be a chance to buy a top Canadian growth stock at an attractive price. If Pet Valu can keep gaining market share, improve efficiency, and benefit from continued demand for pet essentials, the stock could reward patient shareholders handsomely in the years to come.

The post 1 Growth Stock That’s Pulled Back 52% – and Looks Worth Buying Aggressively Right Now appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends Pet Valu. The Motley Fool has a disclosure policy.

Sharp market declines can sometimes disconnect a company’s stock price from its underlying business performance. For long-term investors, those periods of weakness may create attractive opportunities, especially when a company continues generating strong revenue growth and cash flow despite market volatility. That’s why I always keep looking for dividend-paying stocks trading well below their previous highs.

One such Canadian stock that I find attractive right now is Propel Holdings (TSX: PRL). Despite a steep decline in its share price over the last year, the fintech company continues to deliver record revenue growth and expand its business aggressively. In this article, I’ll explain why this undervalued Canadian dividend stock could be worth buying and holding for the long term.

Propel Holdings stock

Headquartered in Toronto, Propel Holdings mainly focuses on providing credit solutions to underserved consumers. Through brands such as CreditFresh, MoneyKey, Fora Credit, and QuidMarket, the company offers installment loans and lines of credit using an artificial intelligence (AI)-powered underwriting platform.

PRL stock currently trades at $21.40 per share with a market cap of $842 million. While the stock has fallen by 36% over the last year, recent momentum has started improving as shares have gained nearly 15% quarter to date. At the current market price, it also offers a dividend yield of 4.4%, with quarterly payouts.

Record revenue growth highlights business strength

Propel’s latest financial results suggest its business remains in strong shape despite the stock’s decline. In the first quarter, the company’s revenue rose 20% year-over-year (YoY) to a record US$166.1 million. That growth was largely driven by stronger consumer demand for its services and rising loan originations. Its total funded originations also climbed 30% YoY to a record US$199.3 million as the company continued expanding its geographic footprint and customer base.

One of Propel’s biggest competitive advantages is its AI-powered underwriting system. Instead of relying heavily on traditional credit scores, the company uses broader data analysis to assess borrower risk and improve lending decisions. This approach has helped support relatively stable credit performance even as the company scales rapidly.

At the same time, Propel’s profitability also remains impressive. In the latest quarter, it generated adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of US$42 million, marking another company record. While its net profit dipped slightly due to increased spending on growth initiatives, the company’s adjusted net profit held steady at US$23 million.

Expansion initiatives and fresh capital could drive future upside

Beyond current results, Propel Holdings continues investing heavily in future expansion opportunities. It recently launched Freshline in partnership with Column, allowing it to target additional customer segments and expand into new geographies.

The company has also strengthened its financial flexibility by securing US$210 million in fresh capital commitments, including funding from Mesirow Alternative Credit and a new institutional investor. This additional capital could fuel its future originations growth and product expansion.

Why this Canadian dividend stock could be worth buying now

While small fintech stocks can sometimes face short-term volatility, Propel’s strong revenue growth, expanding product lineup, and improving operational scale suggest the business may still have big long-term upside potential.

For investors seeking a discounted Canadian growth stock that also offers an attractive dividend income, Propel stock could be worth a closer look right now.

The post 1 Cheap Canadian Dividend Stock Down 36% to Buy and Hold appeared first on The Motley Fool Canada.

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