There are quite a few overlooked stocks on the TSX Index that offer great growth, yield, and value. Indeed, many Canadian investors may be enticed to seek growth opportunities south of the border, given most of the hype surrounding the artificial intelligence (AI) boom has centred around the American mega-cap tech plays, some of which boast market caps north of the $1 trillion mark!
Indeed, bigger isn’t always better when it comes to long-term returns potential. Though economies of scale can come in handy when moving into new, untapped markets, I believe that smaller firms also have a puncher’s chance to take a good amount of share for themselves. Additionally, it’s much harder for a company with a multi-trillion-dollar market cap to double compared to a firm with a market cap south of $100 billion.
In this piece, we’ll check out two intriguing Canadian stocks that are overlooked and likely undervalued.
Canadian Tire
Canadian Tire (TSX:CTC.A) is more than just an old-time Canadian retailer of various discretionary (or nice-to-have) goods. Over the years, the firm has really brought new exclusive brands to Canadian consumers. Whether we’re talking about the acquisition of timeless brands (think Sherwood hockey sticks) or partnerships with American retail firms, Canadian Tire has some of the top brands that nobody else has!
Additionally, Canadian Tire has a strong physical footprint across the country, which makes it really difficult for new entrants to compete against. Sure, e-commerce could take a bite out of brick-and-mortar sales, but Canadian Tire seems to have omnichannel down just as good as most other retail firms.
In any case, Canadian Tire stock is one of the names to load up on any time it’s in a funk. At writing, the stock trades at 14.8 times trailing price to earnings, with a 4.86% dividend yield. My takeaway? It’s time to buy as others fear a recession’s impact on the Canadian consumer. It may not be as severe as expected!
Jamieson Wellness
Jamieson Wellness (TSX:JWEL) is another very old Canadian company that’s continuing to grow at a steady pace. The business of vitamins and minerals could face secular tailwinds as the global population grows. Further, Jamieson’s old age (the brand has been around for generations now!) is an advantage in an age where it’s tough to trust those nutrition labels. Jamieson has some of the best quality control procedures in the industry, making it a go-to for many health-conscious consumers who are short on a particular vitamin or mineral.
As Jamieson capitalizes on the protein boom (millennials just love their protein supplements), as it looks to expand in China, JWEL stock looks absurdly undervalued at 28.1 times trailing price to earnings. Yes, it’s in a boring business, but I believe the growth rate is being discounted. The 2.46% yield is a nice bonus.
The Foolish bottom line
You don’t have to look far for deep value and generous dividend yields. Jamieson and Canadian Tire are just two great income plays that could gain investors through 2024. If I had to pick one, I’d have to go with Jamieson for its global expansion opportunities.
