How I'd Invest $32,000 in Canadian Value Stocks to Maximize My Investment Potential
Here are a bunch of Canadian value stocks that trade at attractive valuations and provide a good mix of income and growth potential.
With $32,000 to invest, I'm not looking to chase high-flying tech names or gamble on speculative plays. Instead, I'm focused on quality businesses that pay reliable income, have solid fundamentals, and offer long-term upside potential.
Here's how I'd allocate my capital across six carefully chosen TSX stocks.
Bank of Nova Scotia offers a nice blend of value and yield. Its international exposure — especially in Latin America — has weighed on the stock at times, but that also creates upside potential as those economies stabilize or grow. Trading at a relatively low price-to-earnings (P/E) ratio and offering a dividend yield of about 6%, BNS can be a cornerstone of any Canadian value portfolio. It's not flashy, but it's reliable — and in the long term, that's exactly what you want from a bank.
Premium Brands Holdings (TSX:PBH) isn't a household name, but its products likely are. This diversified food company owns a portfolio of specialty food brands and has a track record of acquisitions.
The stock has been down by about a third since peaking north of $120 per share in 2021. It has been punished by market concerns over margins and input costs.
For example, its cost of revenue has risen about 33% since 2021, closely trailing its revenue growth of about 36%. Although its trailing-12-month (TTM) operating margin rose to 5.9% versus 4.8% in 2021, its TTM net margin is 1.8% versus 2.7% in 2021.
Management believes there are plenty of organic and acquisition opportunities, which could drive long-term growth. A nice dividend yield of 4.2% sweetens the deal, and if the company executes well, margins and earnings will head higher over the next three to five years. Currently at $80 and change per share, analysts believe shares trade at a good discount of 20%.
Exchange Income is one of the most underrated income plays on the TSX. It operates in niche aviation and manufacturing businesses and has been growing both organically and through acquisitions. With a dividend yield of around 4.6% and a solid dividend-paying history, EIF offers both steady income and decent upside potential.
It's also shareholder-friendly, with a disciplined management team that focuses on returns. At under $58 per share, shares could appreciate 22% over the near term, according to the analyst consensus price target.
Granite REIT gives you exposure to industrial real estate — think logistics facilities and distribution centres that power e-commerce. While industrial real estate faces potential headwinds, directly or indirectly, from tariff changes, Granite's rental income is protected by a 5.6-year weighted average lease term with 94.8% committed occupancy and credit-worthy tenants. At $70.70 per unit, it trades at a 14% discount and offers a 4.8% yield.
Brookfield Infrastructure Partners L.P. offers exposure to global infrastructure assets — utilities, pipelines, and data centres — that generate stable cash flows. It's a great hedge against inflation and economic uncertainty. With a yield of 5.1% and a long runway for growth through global expansion and acquisitions, BIP combines safety with opportunity. It's also backed by the Brookfield name, known for operational excellence and savvy capital deployment.
goeasy is a non-prime Canadian lender with a surprisingly strong track record. It has grown earnings-per-share (EPS) by 27.6% over the past decade and built a defensible niche in consumer finance. While it's more volatile than a utility or bank, its fundamentals are robust, and the valuation is attractive. The company also pays a 3.8% dividend yield, making it a great blend of growth and income.
By diversifying across financials, consumer products, industrials, real estate, infrastructure, and specialty finance, this $32,000 portfolio balances risk and reward. Each of these companies has a clear value proposition, a reasonable valuation, and either dependable dividends or long-term growth catalysts. This isn't about timing the market — it's about owning a diversified portfolio and letting time do the heavy lifting.
The post How I'd Invest $32,000 in Canadian Value Stocks to Maximize My Investment Potential appeared first on The Motley Fool Canada.
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Fool contributor Kay Ng has positions in Bank of Nova Scotia, Brookfield Infrastructure Partners, Exchange Income, Goeasy, Granite Real Estate Investment Trust, and Premium Brands. The Motley Fool has positions in and recommends Brookfield. The Motley Fool recommends Bank of Nova Scotia, Brookfield Corporation, Brookfield Infrastructure Partners, and Granite Real Estate Investment Trust. The Motley Fool has a disclosure policy.
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