1 Undervalued Canadian Stock That Looks Too Cheap to Ignore

Cheap stocks always look tempting, but the best “too cheap to ignore” ideas usually share a few traits. They have a real business, not just a low share price, generate cash, serve a lasting need, and have a path to recovery that investors can actually understand. The market may dislike them due to weak growth, a dividend cut, client outflows, or a messy transition. Yet if the valuation already reflects plenty of bad news, even small improvements can change the story fast.

FSZ

Fiera Capital (TSX:FSZ) is one of those stocks. The Montreal-based company is an independent asset manager with clients across public markets, private markets, institutional accounts, financial intermediaries, and private wealth. In simple terms, it manages money for other people and earns fees for doing it. That can make it a strong business when markets rise and assets grow. It can also make it frustrating when clients pull money out or when markets turn choppy.

The last year gave investors a bit of both. Fiera stock worked to simplify the business, improve margins, reduce debt, and focus more on profitable growth. It also cut its quarterly dividend in 2025, which hurt investor confidence but made the payout more realistic. By Mar. 31, 2026, preliminary assets under management (AUM) stood at about $160.2 billion, down from $164.1 billion at the end of 2025. That decline came largely from market volatility and outflows. Yet private market assets still grew year over year, which gives Fiera stock one area of strength to build on.

Into earnings

The earnings picture shows why Fiera stock looks interesting. In the fourth quarter of 2025, Fiera stock reported revenue of $180.1 million, down 2.1% from the year before. That isn’t exciting on the surface, but adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 2.4% to $54.8 million, and the adjusted EBITDA margin improved to 30.4%. Adjusted net earnings climbed 31.1% to $30 million, or $0.24 per share. In other words, the company made more money from a slightly smaller revenue base, which suggests cost control started to matter.

For the full year, revenue fell 2.3%, while adjusted EBITDA slipped only 0.9%. Adjusted net earnings actually rose 4.8%. That’s the kind of quiet improvement investors can miss when they focus only on AUM. Debt also moved in the right direction, with net debt down to $664 million at year-end from $680 million at the end of the third quarter. The stock recently traded around 16 times trailing earnings, but the dividend yield remained high at about 7.5%. That yield looks more sustainable after the cut, though it still deserves watching.

Future focus

The future outlook depends on whether Fiera stock can stop the outflows and turn its platform back toward steady growth. The company has a broad mix of public and private market strategies, and demand for private credit, infrastructure, real estate, and multi-asset solutions remains relevant for large investors. Fiera stock doesn’t need everything to boom, but it needs better flows, stronger fee revenue, and continued margin discipline. If markets stabilize, even a modest improvement in assets under management could help earnings.

That’s why Fiera stock fits the undervalued theme. It isn’t a flawless stock, as client outflows, debt, market swings, and dividend history all count as real risks. But the market already seems to understand the bad parts. What may get less attention is the improved profitability, the still-large asset base, the private markets growth, and the reset dividend. For patient investors, that combination can create a better risk-reward setup than the headline numbers suggest.

Bottom line

Fiera Capital won’t appeal to investors who want a perfectly smooth ride. Asset managers rarely offer that. But cheap stocks don’t need perfect stories. They need a reason to get better, and Fiera stock has one. If management keeps cutting debt, improving margins, and rebuilding organic growth, today’s valuation could look too pessimistic in hindsight. Meanwhile, even $7,000 can bring in ample income from its 7.6% yield.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTFSZ$5.761,215$0.43$522.45Quarterly$6,998.40

For investors willing to wait, Fiera stock looks like one Canadian stock that may be too cheap to ignore.

The post 1 Undervalued Canadian Stock That Looks Too Cheap to Ignore appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Fiera Capital. The Motley Fool has a disclosure policy.