Exploring Cardinal Energy And 2 Other Promising Small Caps In Canada

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As Canadian large-cap stocks reach new heights, the market is navigating a landscape marked by persistent inflation and softer economic growth. In this environment, identifying promising small-cap stocks can offer unique opportunities for diversification and potential growth. A good stock in today's market is one that demonstrates resilience amid economic uncertainties and has strong fundamentals to capitalize on shifting market dynamics.

Top 10 Undiscovered Gems With Strong Fundamentals In Canada

Name

Debt To Equity

Revenue Growth

Earnings Growth

Health Rating

Total Energy Services

18.83%

18.31%

56.57%

★★★★★★

TWC Enterprises

4.02%

13.46%

16.81%

★★★★★★

Yellow Pages

NA

-11.43%

-17.61%

★★★★★★

Pinetree Capital

0.20%

63.68%

65.79%

★★★★★★

Itafos

25.35%

11.11%

49.69%

★★★★★★

Reconnaissance Energy Africa

NA

9.16%

15.11%

★★★★★★

Mako Mining

8.59%

38.81%

59.80%

★★★★★☆

Corby Spirit and Wine

57.06%

9.84%

-5.44%

★★★★☆☆

Genesis Land Development

48.16%

31.08%

55.45%

★★★★☆☆

Dundee

2.02%

-35.84%

57.20%

★★★★☆☆

Click here to see the full list of 44 stocks from our TSX Undiscovered Gems With Strong Fundamentals screener.

Let's dive into some prime choices out of from the screener.

Cardinal Energy

Simply Wall St Value Rating: ★★★★☆☆

Overview: Cardinal Energy Ltd. is a company focused on the acquisition, exploration, development, optimization, and production of petroleum and natural gas in Alberta, British Columbia, and Saskatchewan with a market cap of CA$988.54 million.

Operations: Cardinal Energy generates revenue primarily from its oil and gas exploration and production segment, totaling CA$502.63 million. The company has a market cap of CA$988.54 million.

Cardinal Energy, a small player in the Canadian oil and gas sector, has shown resilience with earnings growth of 8.6% over the past year, outpacing the industry average of 2.9%. The company has reduced its debt to equity ratio from 84.6% to a satisfactory 11.8% over five years, and its interest payments are well covered by EBIT at a multiple of 31.3x. Recent earnings for Q1 2025 reported revenue at C$118 million and net income at C$21 million, reflecting solid financial health despite forecasts indicating potential challenges ahead with expected declines in earnings averaging 46.4% annually over three years.

TSX:CJ Debt to Equity as at May 2025
TSX:CJ Debt to Equity as at May 2025

Valeura Energy

Simply Wall St Value Rating: ★★★★★★

Overview: Valeura Energy Inc. is involved in the exploration, development, and production of petroleum and natural gas in Thailand and Turkey, with a market cap of CA$784.32 million.