Even as markets celebrate a year of dramatic recovery, some of Canada's most enduring enterprises remain priced as though the celebration passed them by. In the quiet gap between what a business earns and what the market is willing to pay for it, opportunity tends to gather. Three TSX-listed companies — a major bank, a grocery giant, and a power producer — now offer that rarer combination: assets trading below their peers, and dividends that have grown faithfully through cycles of uncertainty.
Three TSX Bargains Offer Growth and Dividend Income Under $100
Mature companies with proven ability to raise dividends through cycles
Mark
Why focus on these three when the market has already recovered so much? Isn't that rally a sign that the good opportunities are gone?
Mimi
The rally has been broad, but it hasn't been uniform. Some companies have caught up to their intrinsic value; others haven't. These three are still trading at meaningful discounts to their peers—lower multiples despite similar or better fundamentals. That's where the opportunity lies.
Mark
What makes you confident these valuations will expand? Why would the market suddenly revalue them?
Mimi
Because the thesis is tied to real earnings growth. Scotiabank benefits from higher loan volumes and better credit quality as the economy reopens. Loblaw's e-commerce and loyalty programs are driving comparable sales. Capital Power has contracted cash flows and a development pipeline. If those things happen—and they're not speculative—the multiples should follow.
Mark
But what if inflation stays high or the economy stalls?
Mimi
That's the risk. But Loblaw's business is actually designed to weather inflation. And Capital Power's long-term contracts protect it from short-term volatility. Scotiabank is the most cyclical of the three, but even there, the dividend cushions downside.
Mark
So you're really buying the dividend as much as the growth?
Mimi
Exactly. These aren't growth stocks in the tech sense. They're mature companies with proven ability to raise dividends through cycles. That combination—modest valuation, growing earnings, and growing dividends—is what compounds wealth over time.
The Pulse
- Canada's broader market rally has left pockets of genuine undervaluation behind, creating a window for disciplined investors before the gap closes.
- Scotiabank, Loblaw, and Capital Power each trade at a meaningful discount to their sector peers on both earnings and book-value multiples, signaling the market has not yet fully priced in their recovery potential.
- Rising loan volumes, resilient grocery traffic, and long-term regulated energy contracts give each company a distinct engine for earnings growth as the economy reopens.
- Dividend yields of 4.5% and 5.4% from Scotiabank and Capital Power respectively — alongside Loblaw's defensive retail moat — offer income alongside the prospect of capital appreciation.
- With all three stocks accessible below $100 per share, the entry point is within reach for investors deploying as little as $1,000, making the value case practical as well as philosophical.
Even as markets celebrate a year of dramatic recovery, some of Canada's most enduring enterprises remain priced as though the celebration passed them by. In the quiet gap between what a business earns and what the market is willing to pay for it, opportunity tends to gather. Three TSX-listed companies — a major bank, a grocery giant, and a power producer — now offer that rarer combination: assets trading below their peers, and dividends that have grown faithfully through cycles of uncertainty.
The past year's market rally has been sweeping, but it has not been uniform. Some of Canada's most established companies continue to trade well below what their underlying fundamentals suggest they are worth — and several of them have been quietly raising their dividends through it all. Three names on the TSX stand out as genuine bargains for investors with modest capital to deploy.
Scotiabank has surged 64% over the past twelve months, yet still trades at a price-to-book ratio of 1.5 — a notable discount to TD at 1.8 and RBC at 2.1. The bank's earnings story is built on several converging forces: reopening economies driving loan and deposit growth, international exposure to faster-growing markets, improving credit quality reducing loss provisions, and steady cost discipline. A 4.5% dividend yield accompanies the thesis, backed by a long record of shareholder returns.
Loblaw offers a different kind of resilience. Canada's dominant food and pharmacy retailer trades at a forward P/E of 14.2, undercutting Metro and Couche-Tard by a meaningful margin. Its business has proven durable through inflation and disruption alike, with competitive advantages in value pricing, home delivery, and digital grocery services continuing to attract and retain customers. The expansion of front-store offerings and a growing loyalty program add further momentum to a franchise that has adapted well to a changing retail landscape.
Capital Power completes the picture. The power producer trades at a forward P/E of 19.5, below peers in the renewables and utilities space. Its appeal lies in the predictability of its cash flows — high-quality generation assets underpinned by long-term regulated contracts and a growing renewables portfolio. Management has delivered 7% annual dividend growth over seven consecutive years and projects a further 5% increase for 2022. The current yield stands at 5.4%.
What unites these three companies is not just their valuation discount, but the discipline behind their dividend histories — a combination that has historically rewarded patient investors willing to look where the market's enthusiasm has not yet arrived.
The stock market's recovery over the past year has been dramatic, but not every company has kept pace with the rally. Some of Canada's most established firms remain trading well below what their fundamentals suggest they're worth—and several of them are also paying dividends that have grown year after year. For an investor with a thousand dollars to deploy, three TSX-listed companies stand out as genuine bargains: Scotiabank, Loblaw, and Capital Power.
Scotiabank has climbed 64% in the past twelve months as investors bet on economic revival and stronger consumer demand. Yet despite that appreciation, the bank trades at a price-to-book multiple of 1.5, a meaningful discount to Toronto-Dominion Bank at 1.8 and Royal Bank of Canada at 2.1. Its price-to-earnings ratio of 11.1 tells a similar story. The thesis here rests on several moving parts: higher loan and deposit volumes as the economy reopens, exposure to faster-growing banking markets outside Canada, lower loan loss provisions as credit quality improves, and disciplined expense management. All of this should flow through to earnings growth and, in turn, to the stock price. The bank has also demonstrated a commitment to returning cash to shareholders through dividend increases, with the current yield sitting at 4.5%.
Loblaw, the country's dominant food and pharmacy retailer, presents a different kind of value. Its forward price-to-earnings multiple of 14.2 undercuts both Metro at 16 and Alimentation Couche-Tard at 18.6. The company operates a resilient business model that has proven resistant to inflation spikes and market turbulence. Its competitive advantages—value pricing, home delivery, and online grocery pickup—are positioning it to capture traffic and grow comparable sales. The expansion of front-store services and its rewards program add further tailwinds. This is a company that has learned how to compete in a digital age while maintaining its core grocery franchise.
Capital Power rounds out the trio. The power producer trades at a forward P/E of 19.5, below peers Algonquin Power & Utilities at 22.3 and TransAlta Renewables at 24.8. What makes Capital Power compelling is the combination of attractive valuation and a fundamentally low-risk business. The company owns high-quality generation assets backed by long-term regulated contracts and a substantial renewables portfolio. These characteristics generate predictable, growing cash flows. Over the past seven years, Capital Power has increased its annual dividend by 7% per year. Management projects a 5% dividend increase for 2022, supported by a strong pipeline of development projects and ongoing cost discipline. The current yield stands at 5.4%.
What ties these three together is that they all trade below $100 per share, making them accessible to investors with modest capital. More importantly, each offers a combination of valuation discipline and proven dividend growth—the kind of characteristics that have historically allowed patient investors to outpace broader market returns over time.
Notable Quotes
Higher loans and deposit volumes, exposure to high-growth banking markets, lower provisions, and expense management will boost earnings and stock price— Investment thesis on Scotiabank
Capital Power's high-quality asset base, long-term regulated and contracted agreements, and strong renewables portfolio position it well to offer higher returns in the coming years— Investment thesis on Capital Power
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