2 Canadian Stocks on Sale That Should Be on Your Radar

Now’s the time to be loading up on high-quality Canadian stocks. There are plenty of discounts to take advantage of right now.

| More on:

The Canadian stock market had a rough last week of September. The S&P/TSX Composite Index limped into October down more than 3% from highs earlier in the month. Still, the index is up an impressive nearly 15% year to date. 

Canadian investors have been enjoying an incredible bull run since early 2020. The market is up more than 50% since the bottom of the COVID-19 crash, so it shouldn’t come as a surprise to hear that the market is general is richly valued right now.

As a long-term investor, I’m not overly concerned with the likely volatility in the short term. My focus remains on buying high-quality companies and holding for the long term. I’m also comfortable paying a premium for a Canadian stock that has loads of market-beating growth potential.

Even at the market’s current valuation, there are still deals to be had. Here are two top Canadian stocks trading below all-time highs that I’ve got on my radar right now. 

Canadian stock #1: Lightspeed

A recent report has sent shares of Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) spiraling. The stock ended September with a loss of more than 20% in the last week of the month. The tech stock is now sitting close to 25% below all-time highs. 

New York-based research firm Spruce Point Capital Management heavily criticized Lightspeed’s business and valuation in its recent report. It alleged that the tech company has been inflating its revenue numbers and other key metrics of the business.

Lightspeed management quickly responded by addressing the serious allegations, highlighting the inaccuracies of the report. 

As a current Lightspeed shareholder, I was surprised to see such a negative report. Lightspeed stock has done nothing but impress investors since it joined the TSX in 2019, and I’m not expecting the market-beating growth to end anytime soon.

The Canadian stock is trading at a premium, but it’s one that I’m willing to pay based on the company’s growth potential. Shares are valued at a lofty price-to-sales ratio above 50. And that’s even with a 20% drop over the past few days. 

It’s certainly not a cheap stock, but it is trading at a rare discount. If you’re looking to add some growth to your portfolio, this is an opportunistic dip that I’d suggest taking advantage of.

Canadian stock #2: Northland Power

Now’s the time to load up on shares of top renewable energy stocks. While the broader market has been soaring through 2021, many of the leaders in the renewable energy sector have been lagging behind the market’s returns.

Northland Power’s (TSX:NPI) nearly $10 billion market cap ranks it as one of the largest renewable energy providers in the country. It also has a wide product offering, which includes hydro, wind, and solar renewable energy options.

This Canadian stock won’t be able to match the growth of Lightspeed. It does, however, have the potential to be a consistent market beater over the long term while also paying shareholders a respectable dividend.

The energy stock is up a market-beating 60% over the past five years and is yielding close to 3% at today’s stock price. You won’t find many other Canadian stocks that offer that kind of mix of growth and passive income.

Down 20% from all-time highs, this renewable energy stock is at the top of my watch list right now.

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 Nicholas Dobroruka owns shares of Lightspeed POS Inc. The Motley Fool owns shares of and recommends Lightspeed POS Inc.

More on Energy Stocks

A solar cell panel generates power in a country mountain landscape.
Energy Stocks

Top Canadian Renewable Energy Stocks to Buy Now

Here are two top renewable energy stocks long-term investors can put in their portfolios and forget about for a decade…

Read more »

oil and gas pipeline
Energy Stocks

Where Will Enbridge Stock Be in 3 Years?

After 29 straight years of increasing its dividend and a current yield of 6%, here's why Enbridge is one of…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Is Enbridge Stock a Buy, Sell, or Hold for 2025?

Enbridge stock just hit a multi-year high.

Read more »

oil pump jack under night sky
Energy Stocks

Where Will CNQ Stock Be in 3 Years?

Here’s why CNQ stock could continue to outperform the broader market by a huge margin over the next three years.

Read more »

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Is Imperial Oil Stock a Buy, Sell, or Hold for 2025?

Valued at a market cap of $55 billion, Imperial Oil pays shareholders a growing dividend yield of 2.4%. Is the…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Where Will Imperial Oil Stock Be in 1 Year?

Imperial Oil is a TSX energy stock that has delivered market-thumping returns to shareholders over the last two decades.

Read more »

Pumpjack in Alberta Canada
Energy Stocks

1 Magnificent Energy Stock Down 17% to Buy and Hold Forever

Down over 17% from all-time highs, Headwater Exploration is a TSX energy stock that offers you a tasty dividend yield…

Read more »