In this article, we will look at the 7 Best Canadian Stocks Under $20.
What’s Happening in the Canadian Stock Market?
The Canadian economy is beginning to settle down as inflation is on a steady downward trend and the Bank of Canada has also taken an easier policy stance, thereby paving the way for stronger economic growth moving forward. On July 19, Reuters reported that the Bank of Canada cut its overnight interest rates by 25 basis points to 4.5% based on the expectation that inflation will continue to fall.
Inflation rates in Canada cooled a little more than expected making interest rate cuts more likely. On July 16, as per Reuters, June 2024 Consumer Price Index (CPI) cooled down to 2.7% a 0.1% decrease month-over-month thereby paving the way for an interest rate cut.
As a result of the interest rate cut, the Canadian stock market was seen performing better. On August 16, Reuters reported that the Canadian stock index ended higher on Friday and witnessed its biggest weekly advance of the year. Investors globally have been cheering the recent signs of the US economic resilience and the recent record high gold prices also boosted the mining sector
The S&P/TSK composite index ended up 0.1% at 23,054.61, posting a seven-day gain streak, recorded as the longest daily winning streak since April 2023.
Looking at a sectoral analysis, the materials group that comprises metal minerals and fertilizer companies was up 1.5% as the price of gold went up by 2% to an all-time high. Moreover, the financial market, which contributed 29% to TSK weighting, grew by 0.6%. The energy sector was a drag, however, and fell 1.1% due to lower oil prices, which settled at $76.65 1.9% lower than expected. The weaker price of oil was mainly attributed to slower demand from China.
On August 13, Ross Healy, chairman of Strategic Analysis Corporation and portfolio manager at MacNicol & Associates Asset Management, appeared on Bloomberg to discuss the performance of TSK and the US stock market. Ross Healy, mentioned that the Canadian stock market is trading at 1.5 times its adjusted book value, whereas the NASDAQ is trading at 9.5 times its book value. Mentioning these numbers Ross Healy, stated that for investors looking to invest for 5 years or longer, the Canadian stock market looks more lucrative due to its potential for growth and the portfolio of stocks it has to offer.
Ross Healy, further believes that we have had a long US advantage and now the market is heading towards a Canadian advantage. Moreover, the precious metal and gold options in the TSK index make the market poised for growth in the long term. Ross Healy, while stating his bull case for gold companies mentioned that companies that have good money on their balance sheets and have been able to find underdeveloped projects to work on have been successful when compared to their competitors.
Now that we have looked at the Canadian economy and financial market. Let’s discuss the 7 best Canadian stocks under $20.
A senior executive looking up at a large boardroom filled with the stocks their company manages.
Our Methodology
To compile the list of 7 best Canadian stocks under $20 we used the Finviz screener. We used the screener to filter out Canadian Stocks that were trading under $20 and sorted them by their market capitalization to get a consolidated list of stocks. Next, we ranked these stocks based on the average price target upside as per Wall Street analysts. The stocks are ranked in ascending order of the average price target upside, as of August 18. Moreover, we have also mentioned the share price of each stock as of August 18, 2024.
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7 Best Canadian Stocks Under $20
7. Equinox Gold Corp. (NYSE:EQX)
Average Price Target Upside as of August 18: 34.17%
Share Price as of August 18: $5.43
Equinox Gold Corp. (NYSE:EQX) is a mining company based in Vancouver, Canada. The company focuses on finding and extracting gold and silver from different locations in the Americas. During the first six years of its establishment, the company has acquired one mine and two mining companies, built three mines of its own, and is also commissioning one of the largest new gold mines in Canada. Equinox Gold Corp. (NYSE:EQX) currently has 7 producing mines, three extraction projects, and one mine in commissioning. From these mining operations, the company has produced approximately 19 million ounces of Proven and Probable (P&P) gold reserves and around 17 million ounces of Measured and Indicated (M&I) gold reserves.
During the second quarter of 2024, Equinox Gold Corp. (NYSE:EQX) produced 122,221 ounces of gold at an average realized price of $2,328 per ounce. The revenue of the company amounted to $269.4 million, a slight decrease year-over-year. The production was impacted by some challenges in its Mesquite and Aurizona mines. Regardless, Equinox Gold Corp. (NYSE:EQX) was able to generate $204 million in net income and has updated its 2024 guidance to 655,000-750,000 ounces of gold.
Management has positioned itself for significant growth with strategic acquisitions and ongoing projects. The second quarter marked a significant step characterized by the first gold pour at the Greenstone mine. This was a significant step as the company now owns 100% of the mine after recently buying a 40% share from its partner. The asset is expected to start production in the next quarter contributing significant growth to the company’s production line.
Equinox Gold Corp.’s (NYSE:EQX) competitive edge comes from its diverse portfolio and its ability to generate revenue. During the past 5 years, the company has been able to improve its revenue by 61%. Moreover, EQX is also cheap at current levels as it is trading at 15 times its forward earnings, a 9% discount to its sector. 9 analysts have a Consensus Buy rating on the stock, with their median price target of $7.29 implies an upside of 34.17%% from the current level.
Massif Capital made the following comment about Equinox Gold Corp. (NYSE:EQX) in its Q1 2023 investor letter:
“Equinox Gold Corp. (NYSE:EQX) was our best-performing investment during the first quarter, returning 57%, outperforming the broader gold sector as measured by the GDX and GDXJ by more than 40% and outperforming gold by roughly 50%. The outperformance was not driven by fundamental factors at the company but rather by a combination of sector sentiment and a beta to the gold price of 3.1. We believe that fundamental factors, specifically the conclusion of construction and eventual ramp-up of the Greenstone mine during the first half of next year, represent potent catalysts for EQX, but this quarter’s appreciation was not fundamentally driven.
While we are pleased with the excellent performance during the first quarter, we would be remiss if we did not point out that the stock remains well below the high of roughly $13.50 achieved in 2020, a price at which we owned the stock. While we are in the black on the position despite a 62% fall from the stock peak, our failure to exit the position at that time remains a painful portfolio management misstep…”
6. Lightspeed Commerce Inc. (NYSE:LSPD)
Average Price Target Upside as of August 18: 34.73%
Share Price as of August 18: $13.36
Lightspeed Commerce Inc. (NYSE:LSPD) engages in providing cloud-based software and payment solutions for businesses in retail, hospitality, and other sectors. The software provided by the company helps businesses manage sales, accept payments, and improve operations. The company operates through various business segments including Lightspeed Retail, Lightspeed Restaurant, Lightspeed eCommerce, LightSpeed Payments, and more.
As per the company’s annual report for the fiscal year ended March 31, 2024, the company grew its subscription and transaction-based revenue by 24% and recurring subscription revenue by around 95%, indicating strong market capitalization of Lightspeed Commerce Inc. (NYSE:LSPD). Moreover, the company had an annual net retention rate of 110% and international diversification with 49% of customers from outside of North America.
Lightspeed Commerce Inc. (NYSE:LSPD) posted a robust fiscal first quarter of 2025 beating analyst revenue and earnings expectations. Revenue of the company grew 27% year-over-year to reach $266.1 million. Whereas its adjusted EBITDA improved to $10.2 million from a $7 million loss last year. As a result of increased revenue the gross profit also improved 23% year-over-year indicating robust profitability.
Improvement across the company’s financials was mainly due to strong transaction-based revenue, increased payment adoption, and growth in average revenue per user indicating a growing market share of the company as a whole. Based on an impressive performance management has raised Q2 revenue guidance between $270 to $275 million with an adjusted EBITDA of around $12 million.
Should you invest in Lightspeed Commerce Inc. (NYSE:LSPD)?
A robust quarterly performance backed by historic revenue growth of 63% during the past 5 years makes Lightspeed Commerce Inc. (NYSE:LSPD) a good investment opportunity. Moreover, around $722 million in cash and cash equivalents on the company’s balance sheet provides significant room for future growth.
Although LSPD is trading at a premium to its sector, its earnings are expected to grow by 12.5% during the year to reach $0.09. 23 analysts have a Consensus Buy rating on the stock, with their median price target of $18 presenting an upside of 34.73% from the current level.
Conestoga Capital Advisors Mid-Cap Strategy stated the following regarding Lightspeed Commerce Inc. (NYSE:LSPD) in its first quarter 2024 investor letter:
“Lightspeed Commerce Inc. (NYSE:LSPD): LSPD is a leading cloud-based software and payment solutions provider to the retail and hospitality industries. The company reported a negative quarter that saw decelerating growth in gross transaction value (GTV) and a worse-than-expected guide on profitability. Following the post-earnings drawdown, there has been a CEO change, a stock repurchase authorization, and a reduction in force. The enhanced capital discipline more closely aligns with the lowered expected revenue growth rate.”
5. Bausch Health Companies Inc. (NYSE:BHC)
Average Price Target Upside as of August 18: 39.62%
Share Price as of August 18: $5.73
Bausch Health Companies Inc. (NYSE:BHC) is an international healthcare company that develops and sells pharmaceuticals and medical devices in the United States, Canada, and Internationally. The company operates through various business segments namely Salix, International, Solta Medical, Diversified, and Bausch + Lomb segments.
To understand the products of the company it is necessary to discuss what each segment of Bausch Health Companies Inc. (NYSE:BHC) does. The Salex segment focuses on gastroenterology products in the U.S., whereas the International segment of the company sells a range of medical devices and pharmaceuticals to the global market. Moreover, the Solta Medical and Bausch + Lomb segments specialize in medical devices and eye care products, respectively. Lastly, the Diversified segment offers a variety of pharmaceutical products, including generic and dental products. Overall, Bausch Health Companies Inc. (NYSE:BHC) is a consolidated healthcare company with operations and clients worldwide.
Bausch Health Companies Inc. (NYSE:BHC) posted a successful second quarter of 2024. Its net revenue grew 6% year-over-year to reach $1.19 billion (excluding Bausch + Lomb) on an organic basis. Revenue growth was on the back of organic growth across the board, led by Xifaxan (a medicine that comes under the Salix segment) which grew 10% year-over-year. Xifaxan made Salix segment the top contributor in revenue generating more than $557 million in revenue.
Regionally, Asia Pacific was one of the strongest markets with 19% growth during the quarter. Within Asia Pacific, South Korea witnessed almost double the business as compared to last year and China and Taiwan posted high teens organic growth as well.
While revenue growth is impressive with the company making a strong footing internationally. What’s more notable is its ability to grow its earnings for the fifth consecutive year. The adjusted EBITDA of the company increased 8% year-over-year and amounted to $614 million. Bausch Health Companies Inc. (NYSE:BHC) was also able to generate a strong operating cash flow of $380 million during the quarter mainly because of the improved business performance and favorable working capital movement.
Bausch Health Companies Inc. (NYSE:BHC) is a good investment to consider. Not only was the last quarter a success, the company has been growing its revenue by 2% and levered free cash flow by 14% during the past 10 years. BHC is also cheap at current levels. It is trading at only 2 times its forward earnings, which is a 93% discount to its sector. Moreover, its earnings are expected to grow by 2% during the year to reach $1.04. 8 analysts have a consensus Buy opinion on the stock with their median price target of $8 presenting an upside of 39.62%% from the current level.
4. Vermilion Energy Inc. (NYSE:VET)
Average Price Target Upside as of August 18: 42.27%
Share Price as of August 18: $10.20
Vermilion Energy Inc. (NYSE:VET) is an international producer of petroleum and natural gas. It operates through acquiring, exploring, and developing petroleum and natural gas reserves. The operations of Vermilion Energy Inc. (NYSE:VET) are spread across Canada, the United States, Europe, and Australia. The company mainly sells its products to refineries, industrial customers, and the international market.
The company posted a successful second quarter of 2024, hitting the higher end of its production guidance. The production for the quarter averaged 84,974 barrels of oil per day, which was a 2% increase year-over-year and almost touching the top end of its Q2 guidance of 83,000 to 85,000 barrels of oil per day per day. The increase in production was mainly due to the company’s early startup of its BC Montney Battery. For perspective, Vermilion Energy Inc. (NYSE:VET) has been constructing a 16,000 barrels of oil per day battery in the Mica area Montney formation in British Columbia, Canada. The BC Montney Battery is a key growth prospect for the company as it will provide an avenue to expand future expansion to 28,000 barrels of oil per day as the company builds its assets.
Moreover, the company was also able to reduce its net debt by $38 million during the quarter indicating management’s commitment to improve its fundamentals.
Is Vermilion Energy Inc. (NYSE:VET) a good investment?
The strength of Vermilion Energy Inc. (NYSE:VET) lies in its ability to grow its business on a global scale. During the Q2 of 2024, the company’s production from international operations averaged 29,987 barrels of oil per day per day and this was despite its scheduled maintenance. What’s more impressive is its operations in the European market. The company has been able to start the SA-10 plant in Croatia in addition to 5 successful explorations in Europe as a whole. As a result of management’s efforts the company has grown its European natural gas production by over 15% during the past 2 years, this is expected to contribute further growth as European gas represents 40% of its total gas production.
If we look at the past 10 years’ performance, VET has been able to grow its revenue by 3% and its levered free cash flow by 16%, indicating robust performance and profitability. Although the stock is trading at a premium to its sector, its earnings are expected to grow by 112.26% during the year to reach $0.44. 12 analysts have a Consensus Buy rating on the stock, with their 12-month median price target of $14.51 presenting an upside of 42.27% from the current level.
3. Veren Inc. (NYSE:VRN)
Average Price Target Upside as of August 18: 47.47%
Share Price as of August 18: $7.35
Veren Inc. (NYSE:VRN) operates as an oil and natural gas exploration and producing company with operations mainly in the United States and Canada. The company mainly focuses on the Exploration and Production (E&P) segment of the industry and searches for resources such as Crude Oil, Tight Oil, Natural Gas Liquids, and other related petroleum products.
Three main sites including Alberta Monteny, Kaybob Duvernay, and Saskatchewan produced 50%, 25%, and 25% of the company’s total production in 2024.
Veren Inc. (NYSE:VRN) is poised for growth, we say this not only because the company posted a successful Q2 2024, but has grown its revenue by 23% during the past 3 years. In Q2, 2024, the company generated $195 million in excess cash flow. The excess cash flow was driven by an impressive production rate of 192,500 barrels of oil per day. The production rate indicated a slight increase subsequently and was in line with the production guidance of 191,000 to 199,000 BOE per day. The success in production rates is attributed to strong performance in Alberta Montney and Kaybob Duvernay regions.
Management proved its discipline in allocating the excess cash flow by returning 60% of it to shareholders through dividends and buybacks. Whereas, 40% was used to reduce debt and in reinvestments. Since the start of 2024, Veren Inc (NYSE:VRN) has been able to reduce its debt by $800 million.
Should you invest in Veren Inc. (NYSE:VRN)?
The company has improved its production capacity and is on the road to achieving its production target. In addition, Veren Inc. (NYSE:VRN) has also improved its efficiency and operational cost. For instance, recent drilling results in the Montney Formation exceeded expectations, with some wells producing up to 1,300 BOE per day.
VRN is cheap at current levels and presents an attractive entry point. It is trading at 6 times its forward earnings, a 48% discount to its sector. Moreover, 13 analysts have a Strong Buy rating on the stock, with their 12-month median price target of $11 presenting an upside of 47.47% from the current level.
2. Hudbay Minerals Inc. (NYSE:HBM)
Average Price Target Upside as of August 18: 47.84%
Share Price as of August 18: $7.73
Hudbay Minerals Inc. (NYSE:HBM) operates as a mining company in North and South America. The company mainly focuses on the exploration, development, and mining of different materials. It operates through three main business segments: Copper Production, Zinc Production, and Gold and Silver Production.
Hudbay Minerals Inc. (NYSE:HBM) acts as a raw material provider for numerous industries including renewable energy technologies, electronics, and construction materials. The company has mines in important geographical locations including Peru, Manitoba, and British Columbia, and sells its products to the international market and global manufacturers.
The company posted a robust second quarter of 2024, despite facing production challenges. During the second quarter, Hudbay Minerals Inc. (NYSE:HBM) produced 28.6-kilo tons of copper, 58.6 kilo ounces of gold, 738.7 kilo ounces of Silver, and 8.1 kilo tons of Zinc. All the segments showed considerable improvement from a year ago except for Zinc, which decreased 7.95% year-over-year. However, the production of copper increased by 31.8%, gold increased by 33.1%, and silver improved by 20.6% year-over-year.
This strong production growth resulted in the company making $425.52 million in revenue up 36.31% year-over-year. While the revenue generation capacity of the company is impressive, what’s more notable is its cash-making ability. Hudbay Minerals Inc. (NYSE:HBM) generated $30 million in free cash flow and continued its trend of positive cash flow over the last 12 months. As a result, the company ended the quarter on a strong financial footing with more than $524 million in cash and cash equivalents.
Should you invest in Hudbay Minerals Inc. (NYSE:HBM)?
Hudbay Minerals Inc. (NYSE:HBM) can be a good investment stating the company has grown its revenue by 16% during the past 10 years. Moreover, the company is on track to achieve its production targets for the year and has also achieved new milestones in terms of improving its consolidated cash cost. For instance, the cash cost improved to $1.14 per pound of copper during the quarter, leading to an improvement in cash cost guidance to a range of $0.90 to $1.10 per pound.
HBM is cheap at current levels, it is trading at 14 times its forward earnings, which is an 11% discount to its sector. 14 analysts have a Strong Buy rating on the stock, with their 12-month median price target of $11.43 presenting an upside of 47.84%% from the current level.
L1 Long Short Fund stated the following regarding Hudbay Minerals Inc. (NYSE:HBM) in its Q2 2024 investor letter:
“Hudbay Minerals Inc. (NYSE:HBM) (Long +31%) shares rallied over the quarter driven by rising copper and gold prices, as well as strong production results. The company’s first quarter results showed higher gold production and robust operating performance at both its major assets, which exceeded consensus expectations. In addition, the company announced a ~US$400m equity raise to support balance sheet de-leveraging and fund its key growth projects. Hudbay is a mid-tier mining company primarily producing copper, alongside gold and zinc, with its key assets located in Canada and Peru. We are attracted to Hudbay due to our positive medium-term outlook for copper and the company’s strong near-term free cash flow generation. This cash generation potential will allow the company to de-lever and recycle capital back into its highly prospective exploration program and major growth projects, most notably its Copper World project in Arizona.”
1. B2Gold Corp. (NYSE:BTG)
Average Price Target Upside as of August 18: 49.71%
Share Price as of August 18: $2.69
B2Gold Corp. (NYSE:BTG) is a low-cost global gold producer based in Vancouver, Canada. The company mainly engages in gold production and has mines operating in Mali, Namibia, and the Philippines. It also has its Goose Project which is under construction in northern Canada and other development projects in Colombia and Finland. As per the company’s forecast, B2Gold Corp. (NYSE:BTG) aims to produce between 800,000 and 870,000 ounces of gold in 2024.
B2Gold Corp. (NYSE:BTG) posted a successful Q2 2024, despite a production setback from an excavator tipover. As a result, the total production during the quarter decreased 5.8% subsequently and also resulted in reduced production guidance by around 50,000 ounces. However, despite the production decrease the company was still able to generate $192 million in operating cash flow.
Management has been focused on its ongoing projects to improve its production and cash costs. It is focused on building new projects and improving the production capacity of its existing assets. For instance, the Fekola complex is expected to contribute over 300,000 ounces annually starting next year. On the other hand, its Goose project in Canada is advancing and is expected to start production by the second quarter of 2025. Looking ahead, the Gramalote project, though still under evaluation, has the potential to add around 200,000 ounces to B2Gold Corp. (NYSE:BTG) production capacity.
Is B2Gold Corp. (NYSE:BTG) a good investment?
We acknowledge that the company faced challenges during the quarter due to the excavator incident. However, if you look at its 10-year history you will see that the company has been able to grow its revenue by 14% and EBITDA by 17% indicating its robust fundamentals. Moreover, its balance sheet is also strong with more than $306.9 million in cash and cash equivalents. A strong balance sheet topped with management’s efforts to leverage its existing assets to improve production makes B2Gold Corp. (NYSE:BTG) an attractive option.
In addition, BTG is also cheap at current levels. It is trading at 11 times its forward earnings, which is a 30% discount to its sector. 14 analysts have a Strong Buy rating on the stock, with their 12-month median price target of $4.30 presenting an upside of 49.71% from the current level.
While we acknowledge the potential of B2Gold Corp. (NYSE:BTG) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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