3 Top TSX Value Stocks to Buy in December 2021

Here are three top TSX value stocks with the potential to outperform in this market and over the medium to long term, in my view.

| More on:
Technology

Image source: Getty Images

The quest to find the best value stocks is always on. Indeed, even though valuations are sky-high, there’s a reason why many investors continue to remain bullish. However, finding the best the TSX has to offer is a daunting task.

To make the search easier, I’ll be discussing three of my top picks on the TSX that I think are worth considering right now.

Top value stocks: Tourmaline Oil

Investors looking to play the energy space may want to consider Tourmaline Oil (TSX:TOU). This company stands out from a valuation perspective as an enticing pick right now. Indeed, the company’s valuation at only eight times earnings is certainly attractive to long-term investors.

Tourmaline’s growth profile has been staggering, to say the least, with commodity prices surging. Tourmaline stock has skyrocketed over 150% year to date. Accordingly, it has been an excellent option for investors who have sought out high-growth opportunities in the energy sector.

At the time of writing, Tourmaline offers a dividend yield of 1.5%, which may not be enticing to many investors. However, this company does declare special dividends occasionally, depending upon its profits. This indicates in that during unfavourable times, it doesn’t need to pay out dividends. This sort of flexibility is something I think is attractive to those bullish on where commodity prices are headed.

West Fraser Timber 

Another commodities player, West Fraser Timber (TSX:WFG)(NYSE:WFG) is a lumber producer that’s been on my radar for quite some time. Indeed, this stock has enjoyed a nice run, surging over 125% over the past five years. That said, I believe there could be more room for growth with some key catalysts in place. 

A few months back, West Fraser completed the takeover of Norbord, which grew the combined company’s overall market share. Furthermore, the business model of West Fraser became much more enticing for investors who are optimistic regarding long-term growth in the lumber sector. 

Indeed, lumber prices have been subject to high volatility, rising during the summer season before plummeting recently. That said, following this acquisition, the unit economics of West Fraser appears to be quite impressive. 

At the time of writing, this stock has a valuation multiple of roughly three times earnings, which is extremely attractive for value investors at these levels. Accordingly, this is an intriguing option for value investors right now. 

Alimentation Couche-Tard 

When it comes to values stocks on the TSX, Alimentation Couche-Tard (TSX:ATD.B) has been one of my top picks for quite some time. At the time of writing, shares of this company trade at 15 times earnings, which is quite attractive from the valuation perspective. This intriguing valuation of the company is primarily a result of the pandemic-related restrictions. 

That said, with vehicles coming back to the roads again, there is plenty of optimism surrounding this gas and convenience store operator. I believe that the company will report higher earnings in the forthcoming quarters. Indeed, it appears that Couche-Tard stock finally has a bit of momentum. This is why it the stock looks even more enticing at these levels. 

Investors must also keep in mind that this company operates in global markets, including Denmark, Russia, and Sweden. Furthermore, it has now expanded its operations into Asian markets as well. 

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC.

More on Investing

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Friday, November 8

The TSX Composite benchmark remains on track to end the week with strong optimism as it currently trades with 2.4%…

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

3 High-Yield Dividend Stocks That Are Screaming Buys Right Now

Are you looking for great income stocks? Here's a trio of high-yield dividend stocks that pay insane yields right now.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Bank Stocks

Best Stock to Buy Right Now: TD Bank or Manulife Financial?

Manulife continues to see momentum in its business and stock price, while TD Bank stock remains down and out.

Read more »

cloud computing
Tech Stocks

3 No-Brainer Tech Stocks to Buy With $1,000 Right Now

These three Canadian tech stocks could be among the best growth opportunities in the market right now.

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Transform a $5,000 TFSA Into a $50,000 Retirement Nest Egg

The TFSA is a powerful tool that can grow a small investment into a substantial retirement nest egg over time.

Read more »

Canadian Dollars bills
Metals and Mining Stocks

2 Cheap Canadian Stocks Under $20 to Buy This November

Cheap TSX stocks such as Endeavour Silver are trading at an attractive valuation in November 2024.

Read more »

happy woman throws cash
Tech Stocks

3 Growth Stocks That Could Be Long-Term Wealth Creators

These three growth stocks aim to grow their financials at a higher rate than the industry average, thus delivering superior…

Read more »

how to save money
Bank Stocks

This 5.9% Dividend Stock Pays Cash Every Month

First National Financial (TSX:FN) has a 5.9% yielding dividend that is paid out monthly.

Read more »