This article features 2 Best Canadian value stocks that investors can consider in April 2024 and have bullish views from Wall Street analysts. Value stocks are shares of companies that are currently perceived as undervalued. Their prices or enterprise value, as compared to various parameters such as earnings, sales, or even dividends, are lower relative to their own historical averages and/or the industry/sector averages. What’s more, value stocks often pay dividends as they belong to well-established companies that have a lesser need for capital to grow their businesses compared to companies in the growth phase.
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Parkland Corp. (TSE:PKI)
Parkland Corp is an energy retail and commercial company operating gas stations under various brands. The company distributes and markets refined fuels, petroleum products, lubricants, and even fast-charging electric vehicle (EV) stations across Canada and the U.S. The stock trades at a 12-month trailing EV/EBITDA (enterprise value-to-earnings before interest, tax, depreciation, and amortization) multiple of 8.16x, below its 5-year historical average of 9.31x.
Further, Parkland pays a quarterly dividend of C$0.35 per share, representing a yield of 3.15%. Plus, the company increased its annualized dividend by 3% to C$1.40 per share and continues to repurchase shares to build shareholder value.
In Fiscal 2023, Parkland’s adjusted earnings per share (EPS) jumped 34% even as sales fell 8.5% to $32.45 million. The company repaid debt worth $747 million and reduced its leverage ratio to 2.8x in 2023.
Is Parkland a Good Stock to Buy?
With seven Buys versus two Hold ratings, PKI stock has a Strong Buy consensus rating on TipRanks. The average Parkland Corp. price target of C$53.88 implies 28.8% upside potential from current levels.
Tourmaline Oil (TSE:TOU)
Tourmaline Oil engages in the acquisition, exploration, development, and production of senior crude oil and natural gas in the Western Canada Sedimentary Basin. Tourmaline claims to be one of the largest natural gas producers in North America.
Tourmaline trades at a trailing 12-month EV/EBITDA multiple of 4.98x, much below its 5-year average of 10.68x. Tourmaline pays a regular dividend of C$0.30 per share, reflecting a below-average yield of 1.73%. The company has increased its base dividend by 7% and also intends to pay a special dividend in all the quarters of 2024, including a Q1 special dividend of C$0.50 per share.
In FY23, Tourmaline’s diluted EPS declined by 62% to $5.03 per share and revenue fell 13% to $6.71 billion. The company is committed to reducing its leverage throughout 2024 with a long-term net debt target of $1.2 to $1.4 billion.
Is Tourmaline a Good Stock to Buy?
With ten unanimous Buy ratings, TOU stock has a Strong Buy consensus rating on TipRanks. The average Tourmaline Oil price target of C$76.95 implies 23% upside potential from current levels.
Ending Thoughts
The above two Canadian value stocks have meaningful upside potential over the next twelve months, as per analysts. Investors seeking exposure to attractive risk-reward profile value stocks can consider investing in them after thorough research.
