The stock market is under pressure due to the Trump administration’s trade policies. The imposition of reciprocal tariffs between the U.S. and Canada has sparked concerns about economic growth, dampened investor confidence, and caused a downturn in many fundamentally strong stocks. However, this market correction has presented an opportunity to buy high-quality Canadian stocks at a discounted price.
Against this background, here are top value stocks to buy and hold for the next decade. Moreover, utilizing a Tax-Free Savings Account (TFSA) can further enhance your investment returns, allowing you to benefit from tax-free capital gains and dividends.
Value stock #1: Lightspeed
Lightspeed (TSX:LSPD) stock has dropped over 47% year-to-date. This decline stems from various factors, including broader economic challenges and the company’s decision to stay public rather than pursue a potential sale after a strategic review. Adding to the concerns, Lightspeed is not yet profitable.
While Lightspeed stock has lost notable value, this omnichannel commerce platform provider continues to deliver solid revenue growth. The company remains focused on increasing average revenue per user (ARPU) and optimizing costs, strategies that are expected to bolster its financial position and pave the way for sustainable profitability.
The company is strategically focusing on expanding its presence in retail across North America and hospitality in Europe. The North American retail segment, in particular, serves as a key growth driver. By expanding its footprint and enhancing ARPU from software and payment solutions, Lightspeed aims to capitalize on its growing base of high-value customers and improve profit margins. Furthermore, Lightspeed is focusing on achieving positive free cash flow and intends to enhance shareholder value through disciplined capital allocation.
Given the sell-off, Lightspeed stock trades at a next 12-month (NTM) enterprise value-to-sales multiple of 0.5 times, which is near the all-time low. This attractive valuation presents a compelling opportunity for buying.
Value stock #2: goeasy
Shares of Canadian subprime lender goeasy (TSX:GSY) offer significant value near the current levels. The financial services company has witnessed its stock price decline by 27% from its 52-week high. Given this pullback, goeasy stock trades at a price-to-earnings multiple of 7.6 times, which is significantly low when you factor in the company’s strong track record of double-digit earnings growth and its attractive dividend yield of 3.9%.
The recent dip in the stock price seems to reflect broader macroeconomic concerns and expectations of a slight decline in the company’s loan yields. However, goeasy’s core fundamentals remain solid. goeasy has a wide range of products and diversified funding sources, and is expanding its reach geographically. These factors position it well to continue growing its consumer loan portfolio. Moreover, its large addressable market offers plenty of room for growth.
Besides offering significant value and growth, goeasy stock is also a compelling investment for investors seeking a growing passive income stream. The company has paid a dividend for 21 consecutive years and recently announced a 25% increase in its annual payout. This marks the 11th year of dividend increases, reflecting its commitment to rewarding shareholders.
Overall, goeasy is a compelling stock for TFSA investors near the current levels to generate tax-free capital gains and income.
