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Highlights
- The S&P/TSX Index has surged by 17.5 per cent year-to-date (YTD).
- Although Canada's main stock market index has soared since the beginning of this year, there a few stocks that remain undervalued and are available at discounted prices
- Undervalued Canadian stocks can help investors to secure long-term gains.
Canada's main stock market index, the S&P/TSX Composite Index, has soared since the beginning of this year. The S&P/TSX Index has surged by 17.5 per cent year-to-date (YTD), which means that most stocks included in it have been performing well overall.
However, there a few stocks that remain undervalued and are available at discounted prices.
As we are nearing the final quarter of this year, we have shortlisted two undervalued stocks listed on the Toronto Stock Exchange (TSX) that could soar higher in future and provide long-term returns to shareholders.
Canfor Corporation (TSX:CFP)
The Vancouver-based company is a provider of sustainable wood-building solutions, and it could emerge as a world leader of green building products. The stocks of Canfor Corporation are currently undervalued at it holds a lower price-to-earnings ratio of 1.9.
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Canfor holds a market capitalization of C$ 3.1 billion. Despite remaining undervalued, CFP stock surged by 51.7 per cent in the last twelve months.
It also grew by eight per cent YTD, outperforming the TSX 300 Composite Index's negative growth of eight per cent in the same period.
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In the second quarter of this year, Canfor Corporation's sales more than doubled to C$ 2.5 billion in comparison to Q2 2020. Its net income expanded to C$ 726.9 million in Q2 2021, as compared to C$ 60.7 million in the same comparable period of 2020.
As Canada focuses on sustainability and the housing market is expected to remain hot in the coming months, Canfor seems to have the potential to further increase its earnings and gain investors' attention. This could lead to an increase in its share prices.
Crescent Point Energy Corp. (TSX:CPG)
As oil prices are expected to rise by 2022, energy companies could do well the future. With a P/E ratio of 1.2, Crescent Point's stock remains undervalued, however, there are chances that it won't remain like that for a long time.
CPG stock catapulted by 100 per cent in the last nine months. On Monday, August 16, it closed at a value of C$ 4.2 per share, which was 198 per cent higher than its 52-week low of C$ 1.41 apiece (October 2, 2020).
Also Read: 2 TSX stocks to buy & hold for 20 years
In the last 10 days, the daily average volume of CPG shares was a little over three million. It remains one of the most traded stocks on the TSX.
Crescent Point also pays a quarterly dividend of C$ 0.003 per unit to its shareholders.
