4 Punchy Canadian Stocks Trading Below Book Value

Maxar Technologies (TSX:MAXR)(NYSE:MAXR) joins three other stocks showing signs of undervaluation despite good reasons to buy.

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Let’s take a look at four stocks on the TSX index that are currently trading below their per-asset valuation. The following stocks come from the tech and mining industries, with a high-profile REIT thrown in for good measure. With P/B ratios below one, are they underperforming or just good value? A quick sift through their stats should give us a few clues.

Maxar Technologies (TSX:MAXR)(NYSE:MAXR)

A front-line TSX index tech stock, Maxar Technologies is deeply undervalued at the moment, trading at a discount of more than 50% off its future cash flow price with a very low P/B of 0.2 times book. With a negative one-year and five-year past earnings growth rates, this isn’t a strong pick for investors with either a focus on recent track record or a hearty balance sheet.

That said, ore shares have been bought than sold by Maxar Technologies insiders over the last few months, and in significant volumes, which is why this stock made the team. It pays a high dividend yield of 17.35%, caused by that big undervaluation and is projected to rise to over 18% next year if undervaluation continues. Meanwhile, a high 69.6% expected annual growth in earnings makes for another solid reason to get invested.

Morguard Real Estate Investment Trust (TSX:MRT.UN)

A strong play for indirect property investment, Morguard REIT keeps its head above water with a one-year past earnings growth of 8.5% that beats a negative five-year average rate. Though it carries a debt level of 85% of net worth, this does represent a reduction over the last five years and is not uncommon for an REIT at the moment.

A 43% discount and market-beating P/E of 10.4 times earnings confirms undervaluation in this doughty ticker that’s currently trading at half its book value. Reasons to buy include a sizeable dividend yield of 7.71% backed by a meagre-but-positive 2.4% expected annual growth in earnings.

Teck Resources (TSX:TECK.B)(NYSE:TECK)

A stock that’s known for its prolonged upward runs post-2016, Teck Resources may be down 1.44% in the last five days, but the share price has been generally rising since last October. Add to an upward trending price a one-year past earnings growth of 23.8% and average five-year rate of 40.2% and you have an outperforming stock with a healthy balance sheet (see an acceptable debt level of 24% of net worth). A low P/E of 5.6 times earnings matches a P/B of 0.7 times book, confirming undervaluation.

Turquoise Hill Resources (TSX:TRQ)(NYSE:TRQ)

Though his mining stock dived last March, it may have finally touched the bottom, having reached an uneasy three-month plateau around the $2.40 mark. Discounted by more than eight times its value per future cash flow, its P/E of 10.2 times earnings and P/B of 0.4 times book don’t seem to do justice to what is essentially a solid stock.

Turquoise Hill Resources had a good year, with earnings growth of 61.7% easily beating its five-year average of 1.4%. Throw in a bit of insider confidence (more shares have been snapped up than ditched by Turquoise Hill Resources insiders of late) and a projected 15.3% annual growth in earnings and you have a potential value opportunity.

The bottom line

It’s a tough call to decide whether undervaluation represents a serious flaw with a stock. While none of the tickers above are perfect, they each have strong potential, be it in dividends, track record, overall health, or future prospects. Depending on one’s investment style, any one of the above stocks could bring potential income to a mid- to long-term personal portfolio owner with an instinct for timing.

Should you invest $1,000 in Maxar Technologies right now?

Before you buy stock in Maxar Technologies, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Maxar Technologies wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. Maxar is a recommendation of Stock Advisor Canada. 

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Man in fedora smiles into camera
Dividend Stocks

How I’d Build a $20,000 Retirement Portfolio With These 3 TSX Dividend All-Stars

If you're worried about returns and want to focus on dividends, these dividend stocks are the first to consider.

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

If I Could Only Buy and Hold a Single Canadian Stock, This Would Be It

Here's why this high-quality defensive growth stock is one of the best Canadian companies to buy now and hold for…

Read more »

Concept of multiple streams of income
Dividend Stocks

3 Safe Dividend Stocks for Retirees

These three Canadian stocks are ideal for retirees due to their solid cash flows, consistent dividend growth, and healthy growth…

Read more »

dividends can compound over time
Dividend Stocks

3 Canadian Market Leaders Where I’d Invest $10,000 for Sustained Performance

Market leaders like Alimentation Couche-Tard Inc (TSX:ATD) are worth an investment.

Read more »

Hand Protecting Senior Couple
Dividend Stocks

How I’d Allocate $12,000 Across Canadian Value Stocks for Retirement Planning

Suncor Energy Inc (TSX:SU) is a Canadian energy stock worth investigating.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Stocks You Can Buy Now and Get Monthly Payouts From for Decades

Are you looking for monthly payouts? There are more than a few great investments that can fuel a monthly income…

Read more »

e-commerce shopping getting a package
Dividend Stocks

Where I’d Put $1,000 Right Away in 2 Top Canadian Stocks for Growth

These two Canadian stocks are strong options and have been for decades, and that's not going to change anytime soon.

Read more »

investment research
Dividend Stocks

How I’d Turn the $7,000 TFSA Contribution Into Monthly Passive Income

Here's how this TSX dividend stock can help you earn more than $50 each month in tax-free passive income.

Read more »