3 Canadian Stocks With Magnificent Upside Potential in 2026

2026-02-26 16:00:00 ET

Sometimes, the best buying opportunities in any market aren’t the top-tier growth stocks everyone is watching. Indeed, there are plenty of under-the-radar options for investors to choose from.

As it happens, I tend to believe that these top Canadian stocks are among the best buying opportunities for investors in 2026. Here’s why I remain bullish on these names, and where I think they could be headed over time.

Kinaxis

Supply chain management software giant Kinaxis ( TSX:KXS ) is one of Canada’s few tech darlings, and the company’s recent performance has been robust.

Powering a number of industry giants around the world, the company’s numbers have been on fire of late. In Q3 2025, the software firm delivered record revenue of $134.6 million, up 11% year-over-year. That revenue growth was driven by software as a service (SaaS) revenue surging 17% to $92 million, with annual recurring revenue jumping by the same amount.

To me, this signals sticky, recurring cash flows. With adjusted EBITDA surging on a fat 25% operating margin, I expect to see much more in the way of profit growth over time.

There’s good reason why analysts still peg this stock as a buy, with plenty of upside over the year ahead. With a reasonable valuation relative to its growth prospects, Kinaxis remains a top opportunity I think investors should be honing in on right now.

Toronto-Dominion Bank

Less of a true pure-play growth stock than a long-term total return compounder, Toronto-Dominion Bank ( TSX:TD ) has been a very profitable holding for many investors for many years.

I don’t think that’s going to change anytime soon.

Canada’s cross-border powerhouse just roared back with a 69% 2025 rally. However, despite this rally, I’d argue that TD’s fundamentals make it a steal at a forward price-earnings ratio of around 13 times, with a mid-3% yield.

With a payout ratio under 40% and strong earnings growth in past quarters (driven by higher net interest margins), there are plenty of operational tailwinds set to take this stock higher. As the yield curve steepens further, and more interest rates come into focus (my base case), TD stock is one which I think should be able to continue to surge, as investors look for relative stability in the financials sector.

SmartCentres REIT

Last, but not least on this list of top Canadian opportunities to consider right now, we come to passive income play SmartCentres REIT ( TSX:SRU.UN ).

This real estate investment trust owns Walmart -anchored centres across Canada, and it’s undervalued at current levels.

Retail real estate has been hit hard in past years, but that trend does appear to be reversing for a select few companies with quality portfolios. I think SmartCentres’ price action shown above highlights that kind of quality premium, though there’s still plenty of room to run should this REIT catch up with many of its peers in terms of sector valuations.

With strong net margins of nearly 27% and a yield of 6.6%, this is a top dividend stock I think investors can own for not only the passive income opportunity this stock provides, but also the capital appreciation upside over the long term. I think the company’s high-quality portfolio of real assets could provide some highly sought-after defensive exposure to investor portfolios, and in this environment, that sort of exposure could come with a premium.

The post 3 Canadian Stocks With Magnificent Upside Potential in 2026 appeared first on The Motley Fool Canada .

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Kinaxis, SmartCentres Real Estate Investment Trust, and Walmart. The Motley Fool has a disclosure policy .

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