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prisoner of war
Energy Company of Canada (TSX:POW) may fall into the undervalued category because it is a holding company, and the market often discounts holding companies even when the underlying companies are performing well. It owns significant stakes in major financial companies, including Great West Lifeco And IGM FinancialIt therefore benefits if insurance revenues remain stable and asset management markets stabilize. It also tends to appeal to investors who like a mix of income and disciplined capital allocation.
This past year the story seemed more like a calm composition than fireworks. In the third quarter of 2025, it reported net income from continuing operations of $703 million, or $1.10 per share, and adjusted net income from continuing operations of $863 million, or $1.35 per share. It also reported a book value per share of $36.74, up 8% year over year, and noted that it had repurchased 7.4 million shares to date at an average cost of $51.33. All this while delivering a 3.7% yield and trading at 14 times earnings.
NTR
Nutrients (TSX:NTR) appears undervalued when the market treats the fertilizer cycle as a permanent problem rather than a normal cycle. Nutrien owns a large potash company and a large retail network selling crop inputs. That mix gives the company exposure to both commodity prices and more stable retail profits. When fertilizer prices fall, investors often punish Canadian stocks harshly, even as global food demand continues to push farmers to invest in yields over time.
The past year revolved around the question of whether potash and nitrogen prices can stabilize while volumes remain healthy. In the fourth quarter of 2025, Nutrien reported net income of $0.58 billion, or $1.18 per share, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.3 billion, with adjusted net earnings per share of $0.83. It also highlighted that adjusted potash EBITDA rose to $2.3 billion in 2025, helped by higher prices and record sales volumes. If the Canadian stock keeps costs low, it could be undervalued at 19.3 times earnings with a 3.1% dividend.
ATD
Food Couche-Tard (TSX:ATD) may appear undervalued if the market is fed up with consistent execution. It operates a vast convenience and fuel network and has a long track record of improving margins, buying back shares and generating reliable free cash flow. You don’t need a thriving economy to function. People are still buying coffee, snacks and fuel, and that resilience could make it a stable compounder that sometimes trades at a discount as investors look for flashier stories.
Recent results show that the company still knows how to perform. In the second quarter of fiscal 2026, it posted net income attributable to shareholders of $740.6 million and diluted earnings per share (EPS) of $0.79, while adjusted net income was approximately $734 million and adjusted diluted earnings per share was $0.78. Moreover, in its strategy update, it referenced fiscal 2025 adjusted EBITDA of $6 billion, net income of $2.6 billion and free cash flow of $1.8 billion, and set expected fiscal 2026 free cash flow of more than $2.5 billion. ATD shares trade at just 22.5 times earnings and offer a 1% dividend yield.
In short
Not only could these three Canadian stocks be undervalued, they could also produce plenty of income even with just $7,000 in each.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| prisoner of war | $65.54 | 106 | $2.45 | $259.70 | Quarterly | $6,947.24 |
| NTR | $97.25 | 71 | $3.03 | $215.13 | Quarterly | $6,904.75 |
| ATD | $84.21 | 83 | $0.86 | $71.38 | Quarterly | $6,989.43 |
The biggest risk is timing. Value can remain undervalued for longer than you want, and cycles can remain unfriendly for longer than expected. If you want to take action without trying to hit the exact bottom, averaging more than a few purchases can be the most peaceful way to do it.
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