As the Canadian market navigates through a period of economic uncertainty influenced by U.S. tariffs and potential inflationary pressures, investors are closely monitoring how these factors might impact growth and monetary policy. In this environment, identifying undervalued stocks on the TSX can be an effective strategy for those looking to capitalize on potential opportunities, as these investments may offer value amidst fluctuating market conditions.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Click here to see the full list of 25 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

Here's a peek at a few of the choices from the screener.

Altus Group

Overview: Altus Group Limited offers asset and funds intelligence solutions for commercial real estate across various regions including Canada, the United States, and Europe, with a market cap of CA$2.18 billion.

Operations: The company's revenue is primarily derived from its Analytics segment, which generated CA$411.28 million, and its Appraisals and Development Advisory segment, contributing CA$109.21 million.

Estimated Discount To Fair Value: 20.4%

Altus Group appears undervalued based on cash flows, trading at CA$49.1 below its estimated fair value of CA$61.68. Recent earnings show improved net income of CA$13.42 million, up from CA$10.23 million, despite flat revenue growth expectations for Q1 2025 and modest annual growth forecasts of 3-5%. The company has repurchased shares worth CA$17.33 million, potentially enhancing shareholder value while maintaining a steady dividend payout of $0.15 per share for Q1 2025.

• Our expertly prepared growth report on Altus Group implies its future financial outlook may be stronger than recent results.
• Unlock comprehensive insights into our analysis of Altus Group stock in this financial health report.

Propel Holdings

Overview: Propel Holdings Inc., along with its subsidiaries, functions as a financial technology company with a market cap of CA$854 million.

Operations: The company generates revenue of $449.73 million by offering lending-related services to borrowers, banks, and other institutions.

Estimated Discount To Fair Value: 47.8%

Propel Holdings is trading at CA$24.49, significantly below its estimated fair value of CA$46.94, highlighting potential undervaluation based on cash flows. Despite debt not being well covered by operating cash flow, the company reported strong earnings growth with net income rising to US$11.61 million recently and forecasts suggest continued robust growth in both revenue and earnings over the next few years. However, its dividend yield of 9.15% isn't fully supported by free cash flows.

• According our earnings growth report, there's an indication that Propel Holdings might be ready to expand.
• Dive into the specifics of Propel Holdings here with our thorough financial health report.

Teck Resources

Overview: Teck Resources Limited is involved in the research, exploration, development, processing, smelting, refining, and reclamation of mineral properties across Asia, the Americas, and Europe with a market cap of CA$20.85 billion.

Operations: The company's revenue is primarily derived from its copper segment at CA$5.54 billion and its zinc segment at CA$3.52 billion.

Estimated Discount To Fair Value: 27.7%

Teck Resources is trading at CA$47.18, notably below its estimated fair value of CA$65.26, suggesting potential undervaluation based on cash flows. Recent earnings reveal a net income of CA$406 million for 2024, despite a decline from the previous year. Analysts predict robust earnings growth at 42.3% annually and revenue growth exceeding the Canadian market average. The company’s strategic investments and share buybacks further underscore its commitment to enhancing shareholder value.

• Our growth report here indicates Teck Resources may be poised for an improving outlook.
• Get an in-depth perspective on Teck Resources' balance sheet by reading our health report here.

Make It Happen

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Seeking Other Investments?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include TSX:AIF TSX:PRL and TSX:TECK.B.

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