Sample Page Title

A Canadian inventory seems to be undervalued when the share value doesn’t match what the enterprise can moderately earn over time. You normally see that hole when buyers overreact to a short-term fear, like a weak quarter, a cycle trough, or a loud headline. The most effective undervalued setups pair sturdy money circulate with a valuation that assumes little enchancment. Then you definitely solely want the Canadian inventory to execute usually for the market to re-rate it. So let’s take a look at three that match the invoice.

POW

Energy Company of Canada (TSX:POW) can fall into the undervalued bucket as it’s a holding firm, and the market usually reductions holding firms even when the underlying companies carry out nicely. It owns significant stakes in main monetary companies, together with Nice-West Lifeco and IGM Monetary, so it advantages when insurance coverage earnings keep regular and asset-management markets stabilize. It additionally tends to attraction to buyers who like a mixture of earnings and disciplined capital allocation.

During the last 12 months, the story has regarded extra like quiet compounding than fireworks. In its third quarter of 2025, it reported web earnings from persevering with operations of $703 million, or $1.10 per share, and adjusted web earnings from persevering with operations of $863 million, or $1.35 per share. It additionally reported e book worth per share of $36.74, up 8% 12 months over 12 months, and famous it had repurchased 7.4 million shares 12 months so far at a median price of $51.33. All whereas offering a 3.7% yield, buying and selling at 14 instances earnings.

NTR

Nutrien (TSX:NTR) seems to be undervalued when the market treats the fertilizer cycle like a everlasting downside as a substitute of a standard cycle. Nutrien owns a serious potash enterprise and a big retail community that sells crop inputs. That blend offers it publicity to each commodity pricing and steadier retail earnings. When fertilizer costs fall, buyers usually punish the Canadian inventory laborious, regardless that international meals demand retains pushing farmers to spend money on yields over time.

The final 12 months revolved round whether or not potash and nitrogen pricing can stabilize whereas volumes stay wholesome. In its fourth quarter of 2025, Nutrien reported web earnings of $0.58 billion, or $1.18 per share, and adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) of $1.3 billion, with adjusted web earnings per share of $0.83. It additionally highlighted that potash adjusted EBITDA elevated to $2.3 billion in 2025, helped by larger costs and file gross sales volumes. If the Canadian inventory retains prices down, it may very well be undervalued buying and selling at 19.3 instances earnings with a 3.1% dividend.

ATD

Alimentation Couche-Tard (TSX:ATD) can look undervalued when the market will get bored of constant execution. It runs an enormous comfort and gasoline community and has a protracted monitor file of enhancing margins, shopping for again shares, and producing reliable free money circulate. It doesn’t want a booming economic system to work. Individuals nonetheless purchase espresso, snacks, and gasoline, and that resilience could make it a gradual compounder which typically trades at a reduction when buyers chase flashier tales.

Latest outcomes confirmed it nonetheless is aware of tips on how to ship. Within the second quarter of fiscal 2026, it posted web earnings attributable to shareholders of $740.6 million and diluted earnings per share (EPS) of $0.79, whereas adjusted web earnings have been about $734 million and adjusted diluted EPS was $0.78. Moreover, in its technique replace, it referenced fiscal 2025 adjusted EBITDA of US$6 billion, web earnings of US$2.6 billion, and free money circulate of US$1.8 billion, and set a fiscal 2026 free money circulate expectation in extra of US$2.5 billion. ATD inventory trades at simply 22.5 instances earnings and presents a 1% dividend yield.

Backside line

Not solely might these three Canadian shares be undervalued, they may present ample earnings, even with simply $7,000 in every.

The principle threat is timing. Worth can keep undervalued longer than you need, and cycles can keep unfriendly longer than anticipated. If you wish to act with out attempting to nail the precise backside, averaging in over just a few purchases could be the calmer method to do it.