Undervalued Canadian Stocks Worth Considering Today

2026-02-23 20:30:00 ET

Investors who missed the rally in the TSX are wondering which Canadian stocks might still be attractive right now to add to a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on dividend income.

BCE

BCE ( TSX:BCE ) shareholders haven’t had much to cheer about over the past four years. The share price fell from more than $70 in 2022 to below $30 last spring. Since then, the stock has since drifted higher in a choppy pattern, and currently trades near $35 per share.

Contrarian investors are betting that the worst of the pain is over and that the market remains too negative on BCE’s long-term prospects.

The company’s $5 billion purchase last year of Ziply Fiber, an American internet services company, gives BCE a platform to expand in the U.S. market. Analysts initially reacted negatively to the deal, preferring that BCE use its proceeds from the sale of its stake in Maple Leaf Sport and Entertainment (MLSE) to reduce debt. Opinions are becoming more optimistic on the potential for the deal to drive growth.

BCE slashed its dividend last year in a decision that upset long-term holders of the stock, but the move put a floor under the share price and the current payout should be safe. Investors who buy today can still get a dividend yield of 5%.

BCE’s media business has been under pressure in recent years due to falling ad revenues, but it is now getting a boost from the popularity of its hit Heated Rivalry television series. This, along with ongoing cost cutting efforts, could mark a turnaround for the group.

Price wars in the mobile segment have eased and BCE is investing to be a key player in the emerging AI market in Canada. The company remains the largest player in the Canadian communications sector and is adjusting its business stay competitive in an industry that is rapidly changing.

Canadian National Railway

Canadian National Railway ( TSX:CNR ) is up about 15% this month, but is still down considerably from where it traded two years ago.

The railway giant said U.S. tariffs and trade uncertainty resulted in a hit of about $350 million in 2025. Ongoing volatility is expected in the coming month as Canada, the United States, and Mexico negotiate to decide if they will extend the Canada-U.S.- Mexico Agreement (CUSMA) that has a July 1st deadline. The recent decision by the American Supreme Court to declare some existing tariffs as invalid adds more uncertainty for businesses the import and export goods from the United States.

CN operates nearly 20,000 route miles of tracks that connect ports on the Atlantic and Pacific coasts of Canada with the Gulf Coast in the United States. Trade terms will eventually get sorted out and that should provide a boost in demand for CN’s services.

The company remains very profitable and is using excess cash to buy back stock. CN has increased its dividend annually for 30 years.

The bottom line

BCE and CN are contrarian picks right now that could deliver decent gains over the long run for patient investors. If you have some cash to put to work, these stocks deserve to be on your radar.

The post Undervalued Canadian Stocks Worth Considering Today appeared first on The Motley Fool Canada .

The Motley Fool recommends Canadian National Railway. The Motley Fool has a disclosure policy . Fool contributor Andrew Walker has no position in any stock mentioned.

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