Many of the best investors ever loved value stocks, and I, for one, don’t think that’s a coincidence.

Value investing works for a number of different reasons. Buying a stock for less than its intrinsic value creates a scenario where the underlying company has multiple paths towards becoming a profitable investment. The stock could go higher based solely on improved sentiment. It could increase because earnings are better than expected (or, often, are less bad than expected). Or it go higher because other investors appreciate the value, causing prices to increase.

In short, there are many good things that can happen when an investor purchases a stock for under intrinsic value. Buying things at a discount is a good thing; just ask any shopper.

The problem with value investing is it it very often accompanied by a poor outlook. Here’s what happens:

  • A stock will fall, often for a good reason
  • Other investors will sell their stock because it has fallen
  • Investors search for a reason for the second (or continued fall)
  • They create a narrative, which can often push the price down more in the short-term
  • This creates a “falling knife” situation, which investors almost universally avoid

It’s hard to buy a stock when most everyone else hates it, a feeling that’s often underestimated until it’s time to pull the trigger and actually buy the investment. But as top investors like Benjamin Graham, Walter Schloss, Peter Lynch, Seth Klarman, and, of course, Warren Buffett, have taught us, it’s often the most profitable time to buy.

Let’s take a closer look at a handful of top value stocks in Canada for 2024, dirt-cheap stocks that are trading at low valuations. There’s plenty of life left in these beaten up stocks. And, because you’re reading this on Canadian Dividend Investing, these stocks also pay succulent dividends. In fact, some even yield more than 5%.

For more great dividend stock ideas, sign up for our free newsletter

Allied Property REIT

The first name in our list of top value stocks is Allied REIT (TSX:AP.un). Allied is one of Canada’s largest owners of office space. Its portfolio consists of 201 properties spanning 14.9M square feet of space. Allied owns property in most of Canada’s largest metros, with the portfolio mostly focused on the Montreal and Toronto markets.

Allied specializes in office space that’s a little different than standard cubes with drab carpet and drop ceilings. It owns distinctive urban workspaces, truly unique space that is also located close to amenities like mass transit. In a world where so many skilled workers don’t want to come back to the office, it’s important for companies to differentiate their space. That’s where Allied comes in.

Yes, Allied’s occupancy has taken a hit over the last couple of years as companies downsize their office footprints. But that trend is slowing as more and more companies realize the benefits of having workers back in the office. Allied has also reported strong activity in the leasing market as companies use this downturn to secure space for the long-term at a reasonable price. These all bode well for the stock over the long-term, even if short-term results are weaker in 2024.

Allied also has a development program in place. It has more than 3M square feet of space in various stages of construction. This space is more than 80% preleased, meaning it’ll add to the bottom line once its completed. These new spaces are expected to add some $100M annually to Allied’s net operating income. Many of these assets are mixed-use properties, too.

The stock is also ridiculously cheap. It currently trades at approximately one-third of net asset value. The stock trades at just 7x 2024’s projected funds from operations, which is a REIT’s version of earnings. Allied also pays a 10%+ dividend, a payout that looks to be covered by earnings — at least in 2024. Allied also sold various assets in 2023, a move which solidified the balance sheet. Put all these together and Allied looks to be a reasonable way to play a bombed out sector.

Related: see my top REIT picks for 2024

Algoma Central

Next is one of my favourite forgotten value stocks. Algoma Central Corporation (TSX:ALC) is a little-known transportation company that can trace its history all the way back to 1899. It operated a railway that ran north from Sault Ste. Marie, Ontario, to Wawa, which produced pulp and iron ore. These days, Algoma is primarily a Great Lakes shipper, with 84 vessels transporting goods between Great Lakes ports. It also has a 50% interest in a specialty shipper that operates in various niche routes around the world.

Algoma is a delightfully boring company, with the added bonus of featuring high barriers to entry. After all, there’s really only space for one shipper in most of the markets where the company operates, especially on the Great Lakes. It has also spent aggressively to maintain this leadership position, owning a fleet with a replacement value of approximately $2B. Algoma has an enterprise value of just $922M today, suggesting investors who buy in today are getting a discount of more than 50% of the replacement value of the fleet alone.

There’s more. Algoma is been consistently profitable for decades now, growing both the top and bottom lines over time. In 2016, the company generated $391M in revenue and a profit of $0.27 per share. It had revenue of $721M in 2023, with earnings of $2 per share. That impressive growth is from more favourable shipping conditions, as well as the company buying new, more efficient ships.

Algoma is also cheap from an earnings perspective. The company is projected to earn $1.91 per share in 2024 and increase that to $2.03 per share in 2025. Shares currently trade hands at under $15 each, putting shares at under 8x forward earnings. It pays a generous 4.8% dividend, and it has more than doubled its dividend since 2016.

Finally, I should note Algoma’s largest shareholder. The Jackman family controls Algoma with a 58% ownership stake via various holdings companies. Although the Jackman family is hardly a household name, they are famous in Canadian value investing circles, controlling an empire that’s estimated to be worth more than $2B.


TransAlta (TSX:TA) is an independent power producer with its headquarters in Calgary. It owns 76 power generation facilities located in Canada, the United States, and Australia. These assets collectively produce some 6,400 MW of electricity each year. It can trace its roots back to Alberta in the 1910s.

The company was a standout dividend grower for years in the 1990s and 2000s, but ran into problems. It had a bunch of operational issues that temporarily hurt earnings, and the portfolio was overly reliant on coal-fired power. Even in the 2010s, coal was the fuel of the past, not the future. The company then spun out many of its renewable power assets into a separate stock, causing many investors to sell their shares in exchange for the greener subsidiary. It all culminated in dividend cuts and more than a decade of lackluster performance.

But TransAlta has been doing some good things recently. It has completed the transformation of its coal-fired power plants to natural gas. The company also purchased all the outstanding shares of TransAlta Renewables, bringing that investment back into the fold. It has moved to lock in contracted rates for much of its power, rather than depending on the whims of floating rates. It also kept debt debt around $3B despite making some pretty substantial moves.

TransAlta should generate gobs of free cash flow going forward. It recently told investors to expect between $450M and $600M in FCF in 2024. TransAlta’s shares, meanwhile, have a market cap of just over $3.3B. That gives us a price-to-free cash flow ratio of just 7x on the low end of projected free cash flow. That’s an excellent valuation. No matter how you slice it, TransAlta is one of the cheapest value stocks on the TSX.

The company’s dividend isn’t very exciting, but it does offer a 2% yield which has been growing steadily since 2016. It is also repurchasing shares, buying more than 22M shares since 2016. That’s a little less than 10% of its float. It’s not huge, but every little bit helps.


Transcontinental (TSX:TCL.A)(TSX:TCL.B) is a family-owned Canadian printing company that operates in the packaging and printing sector. Traditionally the company printed magazines, newspapers, and advertising material, but that business has slowly died off over the years. It diversified into packaging, mainly the production of different plastic products geared towards consumer goods. It also owns a smattering of media assets, although they account for just 4% of total revenues.

The company has invested heavily in its packaging division, growing it to 28 plants and more than 4,000 employees, with locations in Canada, the United States, Latin America, the UK, and New Zealand. Approximately 80% of revenues come from the 17 plants it has in the United States.

Unfortunately, Transcontinental’s foray into packaging isn’t exactly going to plan. Revenue peaked at a little over $3B in 2019, dropping some 15% in 2020. The top line has recovered since then, but still hasn’t cracked the $3B mark again. Analysts predict stagnant revenues for 2024 and 2025, too. This lack of growth means Transcontinental has been on these lists of top value stocks for years now.

Earnings are a similar story. Transcontinental’s cash flow from operations peaked at $539M in 2018. It hasn’t surpassed $500M since — and it fell to just under $250M in 2023. Management has an ambitious plan to increase cash flows, which includes cutting a bunch of non-core expenses, selling off some non-core operations, and selling some $100M worth of real estate. Investors disappointed with years of lackluster performance are taking a wait-and-see approach with this turnaround plan, but this author thinks it has promise.

Even if Transcontinental doesn’t improve its cash flow, shares are still cheap. The company has a total market cap of just over $1.1B, putting shares at under 5x trailing cash flow from operations. It also pays a generous 6.7% dividend, a sustainable yield with a payout ratio of approximately 40% of cash flow.


Altagas (TSX:ALA) is a leading North American midstream energy company, focused on the processing, transportation, and storage of natural gas. It also has a robust utilities business, serving 1.6M residential, commercial, and industrial customers with natural gas in the District of Columbia, Maryland, Virginia, and Michigan.

Unlike oil and especially coal, the future looks relatively bright for natural gas. Sure, it’s a fossil fuel, but it burns cleaner than the alternatives. Usage is expected to continue to grow over the next 5-10 years, with potential declines after that — provided the future of renewable energy sources plays out as expected. That’s a big if.

Canadian natural gas also has a big short-term catalyst — the opening of the LNG export terminal in Kitimat. That should happen sometime in 2025. This facility will export 1.84 Bcf/d, a significant amount of demand that will be, in part, processed by the various natural gas processing facilities owned by Altagas in Alberta.

Turning to the company’s utility division, this delivers highly predictable cash flow with a fairly steady level of growth. The company’s rate base has grown by 9% per year since 2019. Population growth in the areas it serves is expected to be strong, too. It also has various plans in place to improve returns from this part of the business, including making operations more efficient and improvements in rates allowed by regulators.

Put it all together and Altagas will likely earn some $2.50 per share in 2024. About half those earnings will go towards paying dividends. That puts shares at just over 12x forward earnings. That’s not as cheap as the rest of the stocks on this list, but is still a great price to pay for a company with nice assets, what should be steadily growing earnings, and a solid management team. And the dividend is a robust 3.8%, with expected growth in that payout to be between 5-7% per year.

The bottom line

In a world where sexy growth stocks like Microsoft, Costco, or Constellation Software trade for eye-popping valuations, it’s easy to dismiss value stocks. But these unsexy names could very well be ready to outperform, simply because they’re so cheap. Plus, they all pay generous dividends, payouts that look to be quite sustainable. That always helps in case the share price doesn’t cooperate.

Wait! Before you go, don’t forget to subscribe to our free newsletter. It’s chock full of great dividend ideas, info on various value stocks, actionable investments, and good stuff you’ll actually enjoy reading. No BS, no spam, just solid investing content in your inbox, each Sunday morning.