2 Growth Stocks Down 6% to 9% to Buy Now

Volatility has returned to the TSX, and with it, a growing list of great businesses trading at prices that finally make sense. When quality names sell off for reasons that are more about headlines than fundamentals, long‑term investors get their shot.

Here are two top Canadian growth stocks I think have excellent growth potential, but are also trading at discounts of 9% and 6%, respectively, right now.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS) has been a laggard in Canada’s big‑bank club for some time. That’s saying something, considering this stock’s performance noted below.

However, I think this relative underperformance is exactly what creates today’s opportunity. The stock is down nearly 10% from recent highs, largely on concerns about slower growth in Latin America and a softer domestic economy.

That said, for those willing to invest in this recent weakness, I think you’re getting paid very well to wait. With a generous dividend yield of 4.5% that’s backed by solid capital ratios and consistent profitability, BNS stock is trading at a very attractive level in my books. Indeed, this is a stock that’s now trading at just 14 times earnings, and I expect those earnings figures to continue to climb.

That’s due in part to Scotiabank’s rock-solid balance sheet, its diversified loan book, and strong tier-one capital ratios. With investors likely to look to financial stocks as a way to benefit from a steepening yield curve and wider net interest margins, this would be one of my top ideas as a way to do so right now.

Canadian National Railway

Now, onto one of my favourite picks overall: Canadian National Railway (TSX:CNR).

CN Rail is another name the market has taken down from its recent 52-week high, despite a solid move higher in recent weeks. It does appear to me that the market is beginning to catch onto the company’s long-term potential, with a nice rise seen as concerns around a cooling economy appear to be giving way to geopolitical concerns.

The good news for a North American railway is that these geopolitical issues won’t affect the company’s core operations. As such, I think CN Rail’s strong underlying fundamentals create the fertile ground upon which future returns can grow.

With robust free cash flow, steady dividend hikes, and share repurchases, I think CN Rail’s ability to keep its balance sheet in good shape with manageable leverage and investment‑grade credit ratings will be important to watch. Even if carloads soften for a few quarters, CN Rail’s diversified mix across grain, intermodal, and industrial products helps smooth the cycle.

Bottom line

For those thinking about the long term, these two stocks look like solid, defensive growth bets worth betting on right now.

The post 2 Growth Stocks Down 6% to 9% to Buy Now appeared first on The Motley Fool Canada.

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More reading

• 3 TSX Superstars Poised to Outperform the Market in 2026
• TFSA Investors: The CRA Is Watching These Red Flags
• My 3-Stock TFSA Game Plan for 2026
• A Canadian Dividend Stock Down 18% to Buy & Hold Forever
• How to Generate $500/Month Tax-Free Using a TFSA

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Bank Of Nova Scotia and Canadian National Railway. The Motley Fool has a disclosure policy.