Where Is the Deep Value in Canadian Stocks This Week?
Wednesday, October 21, 2026 · Johnny Hopkins
The Acquirer’s Multiple® Canada All TSX screen gives investors a way to search Canadian-listed companies for value, cash generation and shareholder returns.
This week’s screen contains 87 companies, with a median Acquirer’s Multiple of approximately 7.6x and a median free-cash-flow yield of approximately 11.9%.
At the cheaper end, 63 companies trade below 10x, 46 trade below 8x and 13 trade below 5x.
More than half of the companies in this week’s screen trade below an 8x Acquirer’s Multiple, highlighting a broad range of potentially undervalued businesses across the Canadian market.
Where the Cheapest Opportunities Are Concentrated
The sub-8x group spans several areas of the market, including:
- Insurance, investment services and specialty finance
- Energy exploration, downstream energy and oilfield services
- Automotive parts and consumer-related businesses
- Food and beverage producers and retailers
- Telecommunications, software and technology services
- Industrial distributors, construction materials and packaging
- Healthcare and professional services
- Mining, chemicals and forestry products
- Transportation, hospitality and leisure goods
Insurance and automotive-related businesses remain particularly well represented, each accounting for four companies trading below 8x.
Industrial distribution also features prominently, with three qualifying companies, while marketing and printing services, chemicals, software, telecommunications and packaging each contribute multiple companies.
Energy remains represented across exploration and production, integrated oil and gas, downstream energy and oilfield services.
Technology contributes candidates across software, internet and data services, telecommunications and technology consulting, while consumer-related businesses appear across food production, retail, leisure goods and hospitality.
The diversity of industries gives Canadian value investors opportunities to investigate beyond the country’s largest banks, energy producers and mining companies.
Cheap—But Are They Producing Cash?
A low valuation becomes more interesting when supported by consistent cash generation.
Among the 46 companies trading below 8x, the median free-cash-flow yield is approximately 15.2%, and all 46 report a positive free-cash-flow yield.
The group’s median five-year return on assets is approximately 9.5%, while 45 companies report a positive shareholder yield.
These figures suggest that many of the statistically cheap Canadian companies are also generating cash and returning capital to shareholders.
The combination of a median free-cash-flow yield above 15% and positive shareholder yields across almost the entire group provides investors with a substantial pool of candidates for further research.
However, high free-cash-flow yields do not necessarily indicate sustainable earnings. Commodity prices, cyclical demand, working-capital movements and temporary improvements in profitability can all influence reported cash generation.
Investors should also examine whether shareholder distributions are supported by recurring cash flow rather than borrowing or asset sales.
Why Canadian Value Stocks Require Additional Research
Canada’s equity market offers exposure to a diverse range of businesses, but investors should consider the different risks affecting each industry.
Energy and mining companies can generate substantial cash flow during favourable commodity cycles, although earnings and valuations may change significantly when prices weaken.
Financial businesses require particular attention because conventional enterprise-value and cash-flow measures can behave differently from those of non-financial companies.
Smaller Canadian-listed companies may also have lower trading liquidity, concentrated customer bases and less comprehensive analyst coverage.
The Acquirer’s Multiple is a starting point for research. Investors should examine balance-sheet strength, cash-flow consistency, capital allocation, competitive advantages and whether recent earnings are representative of longer-term profitability.
Bottom Line
Approximately 53% of this week’s 87 Canada All TSX companies trade below an 8x Acquirer’s Multiple, with 13 companies trading below 5x.
The sub-8x group has a median free-cash-flow yield of approximately 15.2%, with all 46 companies reporting positive free-cash-flow yields.
The group’s median five-year return on assets is 9.5%, while 45 of the 46 companies report positive shareholder yields.
Compared with last week’s screen, the number of companies trading below 8x has declined from 49 to 46, while the number trading below 5x has fallen from 14 to 13.
The median Acquirer’s Multiple has increased slightly from 7.4x to 7.6x, while the median free-cash-flow yield among sub-8x companies remains relatively stable, increasing from 15.1% to 15.2%.
Insurance and automotive-related businesses continue to feature prominently, alongside opportunities across energy, industrials, technology, healthcare and consumer-related industries.
These measures suggest that the cheaper end of the Canadian market continues to contain a substantial pool of statistically inexpensive, cash-generating businesses, despite a modest reduction in the number of companies trading at the lowest valuation multiples.
As always, attractive screening metrics are a starting point rather than a conclusion about investment quality. Investors should assess earnings durability, financial strength and the risks behind each valuation before making investment decisions.
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