7 of the Top Canadian Value Stocks to Buy in March 2025

Key takeaways

Strong Cash Flow is Key: Value stocks like Canadian Natural Resources, Manulife, and Canadian Tire generate consistent cash flow, allowing them to support dividends, buybacks, and reinvestment even in uncertain markets.

Diversification Helps in Volatile Times: These stocks span multiple industries—energy, retail, finance, and manufacturing—showing that value opportunities exist across different sectors, each with its own economic drivers.

Valuations Remain Attractive: Many of these companies trade at reasonable price-to-earnings ratios, offering solid upside potential as the market re-evaluates their long-term stability and earnings power.

3 stocks I like better than the ones on this list.

Value investing is one of the most popular investment strategies of all time. Many of the most successful investors, such as Benjamin Graham and Warren Buffett, are value investors.

Unlike growth investing, which is a strategy directed at paying a higher premium now for growth in the future, value investing addresses inefficiencies in the stock market. It allows investors to buy stocks at a discount to their “intrinsic value,” which is related to the future cash flow the investment is expected to produce.

As mentioned, this is different than a growth stock and growth companies in general, as investors are generally speculating on future profitability that has not come to fruition. Many popular stocks like Amazon, Tesla, Alphabet, and Apple are growth stocks, even with Apple paying dividends.

I won’t get into the intricacies of discounted cash flow analysis. However, this article will identify some of the most promising Canadian value stocks.

On this list, we want Canadian stocks trading at strong valuations relative to their future growth, a more extended outlook than other short-term strategies such as day trading stocks.

What criteria must be met to make it on this list of top Canadian value stocks?

Value and “cheap stocks” are entirely subjective. Depending on a company’s future outlook, you may have a completely different price target than an analyst or friend.

You may think a company like Microsoft is high-quality, while an analyst might be bearish. That is the fantastic thing about investing. Price predictions for individual stocks are based on outlook, and outlook is based on personal opinions.

But for this list of Canadian value stocks, we’ll have some criteria we follow regarding metrics. They must trade at an attractive price-to-earnings or price-to-free cash flow ratio, often below historical valuations and the industry average. A low price to book, or P/B ratio, is also helpful. However, we’d consider a low PE ratio to be more critical.

There will also need to be earnings and sales growth. Many stocks will be considered value options because of a decline in stock price and a high dividend yield. However, an earnings decline or a material shift in the overall business could be the reason for the decrease in share price and that high yield.

With that said, let’s get started. Keep in mind these stocks are in no particular order.

Canada’s largest life insurance company

Manulife Financial (TSE:MFC)

Manulife is a global financial services company specializing in insurance, wealth management, and investment solutions. It operates under the John Hancock brand in the U.S. and has a strong presence in Asia, where it sees significant growth potential. The company generates steady income from premiums and investment management, making it a defensive yet profitable player in the financial sector.

P/E: 14.4

5 Yr Revenue Growth: 1.7%

5 Yr Earnings Growth: 1.5%

5 Yr Dividend Growth: 9.0%

Yield: 3.9%

  • Strong dividend yield (above 5%), backed by stable cash flows.
  • Trading at a low price-to-earnings (P/E) ratio compared to peers.
  • Expanding footprint in Asia, where insurance demand is rising.
  • Improving efficiency through cost-cutting initiatives.
  • Well-capitalized balance sheet with strong liquidity.
  • Benefiting from higher interest rates, which improve investment returns.
  • Interest Rate Impact: Rising rates benefit its investment portfolio, but a sharp decline could hurt returns.
  • Asian Market Growth: Expansion in China and Southeast Asia could be a long-term catalyst.
  • Regulatory Changes: Compliance costs and capital requirements may impact profitability.
  • Dividend Sustainability: Investors will watch payout ratios closely to ensure continued high dividends.
  • Market Volatility: A downturn in financial markets could hit investment income.
  • Economic Slowdown: Weaker economic conditions may reduce demand for insurance products.
  • Currency Fluctuations: Exposure to multiple currencies, especially the Asian market, creates forex risks.
  • Regulatory Risks: Stricter capital requirements could impact financial flexibility.

One of Canada’s largest oil producers

Canadian Natural Resources (TSE:CNQ)

Canadian Natural Resources is a major player in Canada’s oil and gas sector, known for its diversified asset base across oil sands, heavy crude, and natural gas. The company has one of the lowest-cost operations among peers, making it resilient even during downturns. With strong free cash flow and a shareholder-friendly approach, CNQ is a top choice for value investors.

P/E: 12.5

5 Yr Revenue Growth: 12.9%

5 Yr Earnings Growth: 28.6%

5 Yr Dividend Growth: 22.5%

Yield: 4.8%

  • Consistently growing dividends, with a solid yield.
  • Strong free cash flow allows for share buybacks and debt reduction.
  • Low-cost production helps sustain profitability during oil price swings.
  • Exposure to multiple energy sources reduces reliance on any one segment.
  • Long reserve life, ensuring production for decades.
  • Priced attractively relative to earnings and cash flow.
  • Oil Price Movements: CNQ’s stock moves with global crude oil prices.
  • Pipeline Expansions: More pipeline capacity improves market access and pricing.
  • Carbon Regulations: New emissions policies could increase operating costs.
  • Shareholder Returns: The company has been aggressive with buybacks and dividends.
  • Commodity Price Volatility: Oil price drops can squeeze margins.
  • Environmental Regulations: Stricter climate policies could raise costs.
  • Operational Risks: Production issues or accidents could impact profitability.
  • Recession Risks: Economic slowdowns could reduce energy demand.

Leading manufacturer of recreational vehicles

BRP Inc. (TSE:DOO)

BRP designs and manufactures snowmobiles, personal watercraft, and off-road vehicles under brands like Ski-Doo, Sea-Doo, and Can-Am. The company has a strong presence in North America and continues to expand globally. Known for its innovation and brand strength, BRP offers solid long-term value despite cyclical demand.

P/E: 27.4

5 Yr Revenue Growth: 14.6%

5 Yr Earnings Growth: 32.9%

5 Yr Dividend Growth: 14.9%

Yield: 1.2%

  • Trading at a discount relative to historical valuation.
  • Strong market share in power sports and recreational vehicles.
  • Growing international presence, particularly in Europe and Latin America.
  • Expanding into electric vehicles for future growth.
  • History of shareholder-friendly policies, including buybacks.
  • Resilient earnings despite economic headwinds.
  • Consumer Spending: Demand for recreational vehicles depends on discretionary income.
  • Electric Vehicle Adoption: BRP is investing in electrification across its product lines.
  • Supply Chain Stability: Component shortages could impact production.
  • New Product Innovation: Consistently launching popular new models drives growth.
  • Economic Slowdowns: Discretionary spending declines could hurt sales.
  • High Debt Levels: Leverage needs to be managed carefully.
  • Supply Chain Disruptions: Delays in production impact revenue.
  • Seasonality: Sales fluctuate with weather and seasons.

Canada’s largest natural gas producer

Tourmaline Oil (TSE:TOU)

Tourmaline is a major player in natural gas, benefiting from low production costs and strong demand for LNG exports. The company has a shareholder-friendly approach, regularly paying special dividends and maintaining a strong balance sheet.

P/E: 14.9

5 Yr Revenue Growth: 23.6%

5 Yr Earnings Growth: 27.7%

5 Yr Dividend Growth: 23.2%

Yield: 2.0%

  • High free cash flow generation supports dividends.
  • Positioned well for growing LNG exports.
  • Low-cost production enhances profitability.
  • Strong balance sheet with minimal debt.
  • Exposure to higher natural gas prices due to global demand.
  • Priced attractively compared to earnings.
  • LNG Expansion: Canada’s LNG sector is growing, benefiting producers like TOU.
  • Natural Gas Prices: Highly sensitive to market fluctuations.
  • Regulatory Changes: Climate policies could impact operations.
  • Dividend Payouts: Special dividends may continue if cash flow remains strong.
  • Commodity Price Risk: Volatile natural gas prices impact earnings.
  • Regulatory Uncertainty: Carbon taxes and emissions limits could hurt margins.
  • Operational Risks: Drilling and production hiccups can disrupt revenue.
  • Weather Dependence: Warmer winters reduce natural gas demand.

Global leader in apparel basics

Gildan Activewear (TSE:GIL)

Gildan manufactures t-shirts, socks, and activewear at a low cost. With strong brand recognition and an efficient supply chain, it remains a top value play.

P/E: 20.4

5 Yr Revenue Growth: 1.9%

5 Yr Earnings Growth: 12.8%

5 Yr Dividend Growth: 10.7%

Yield: 1.6%

  • Low-cost production with strong profit margins.
  • Consistent dividend growth.
  • Global presence mitigates regional risks.
  • Expanding into sustainable clothing.
  • Strong cash flow supports shareholder returns.
  • Valuation remains attractive.
  • Retail Demand: Apparel sales rebound impacts earnings.
  • Sustainability Push: Growth in eco-friendly clothing.
  • Inflationary Pressures: Input costs affect margins.
  • E-commerce Expansion: More direct-to-consumer sales.
  • Economic Sensitivity: Dependent on consumer spending.
  • Raw Material Costs: Cotton price fluctuations.
  • Competition: Fast fashion disruptors.
  • Currency Risks: Global operations expose it to forex changes.

Leading fuel and convenience store operator

Parkland Fuels (TSE:PKI)

Parkland Fuels is one of Canada’s largest independent fuel distributors and convenience store operators. The company supplies gasoline, diesel, and propane while also running a growing network of retail and commercial fuel stations across North America and the Caribbean. Parkland has been expanding through acquisitions, improving its convenience store offerings, and focusing on high-margin non-fuel sales to drive profitability.

P/E: 23.8

5 Yr Revenue Growth: 17.6%

5 Yr Earnings Growth: 11.4%

5 Yr Dividend Growth: 3.0%

Yield: 4.3%

  • Trading at a reasonable valuation relative to earnings.
  • Strong and growing dividend yield, appealing to income investors.
  • Expanding non-fuel sales, which offer higher margins.
  • Aggressive acquisition strategy to increase market share.
  • Fuel demand remains stable despite economic cycles.
  • Investing in renewable fuels to adapt to industry trends.
  • Retail Fuel Demand: Gasoline sales remain a core revenue driver despite EV growth.
  • Non-Fuel Expansion: More focus on food and convenience retail to improve profitability.
  • Acquisition Strategy: Continues to buy smaller fuel networks to expand reach.
  • Energy Transition: Adapting to biofuels and EV charging solutions for future growth.
  • Fuel Price Volatility: Sudden swings in fuel prices impact margins.
  • Regulatory Risks: Carbon taxes and emissions policies could raise costs.
  • Debt from Acquisitions: Rapid expansion comes with financial leverage risks.
  • Competition: Facing pressure from major fuel brands and grocery retailers in convenience sales.

Iconic Canadian retailer with diverse operations

Canadian Tire (TSE:CTC.A)

Canadian Tire is one of Canada’s most well-known retailers, offering everything from automotive parts to household goods and sporting equipment. It owns several brands, including Mark’s, Sport Chek, and Helly Hansen, and operates a growing financial services segment through Canadian Tire Bank. Despite challenges in retail, Canadian Tire continues to deliver strong cash flow and has a well-diversified business model that helps it navigate economic downturns.

P/E: 14.1

5 Yr Revenue Growth: 3.4%

5 Yr Earnings Growth: -18.7%

5 Yr Dividend Growth: 13.9%

Yield: 4.3%

  • Consistently profitable with strong cash flow generation.
  • Owns valuable real estate, providing financial flexibility.
  • Dividend growth history, making it a reliable income stock.
  • Diversified revenue streams across retail, financial services, and real estate.
  • Loyal customer base, boosted by the popular Triangle Rewards program.
  • Trades at a reasonable valuation compared to historical levels.
  • Consumer Spending Trends: Economic shifts impact discretionary purchases.
  • E-commerce Growth: Expanding digital sales and online fulfillment strategies.
  • Loyalty Program Expansion: Triangle Rewards helps drive repeat business.
  • Cost Pressures: Inflation and wage growth affecting retail margins.
  • Retail Competition: Facing pressure from Amazon, Walmart, and specialty retailers.
  • Economic Slowdowns: Discretionary spending declines could hit sales.
  • Supply Chain Disruptions: Delays in inventory impact revenue.
  • Interest Rate Sensitivity: Higher rates could slow financing growth for big-ticket items.

Overall, these are some of the best Canadian stocks when it comes to value

There have recently been many more value stocks on the TSX composite index, mainly due to economic circumstances. However, these are certainly some of the best. They have attractive price-to-earnings ratios and solid fundamentals.

There is a nice mix on this list as well. Although there may be multiple attractive opportunities on the TSX today, I decided to switch it up and include financials, oil and gas, retailers, and more. I didn’t want to have too many companies in one specific sector, or else the list would get quite repetitive.

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