Investors frequently face a familiar challenge: deciding between the potential for substantial long-term gains by investing in undervalued opportunities and the appeal of steady income from high-dividend stocks. 

While conventional financial wisdom suggests that companies with generous dividends may lack the necessary capital for growth, this perspective can be overly simplistic. As a discerning investor, it’s crucial to recognize that the financial landscape is not set in stone.

By digging deeper, you can ALWAYS uncover opportunities that align with your investment goals, regardless of market fluctuations, industry performance, or varying P/E ratios or any other measurable statistic you can come up with. There are always avenues for returns that fit your strategy. However, this exploration requires considerable effort and thorough research and no……relying solely on stock screeners won’t suffice.

Today, our team of expert market analysts has compiled a list of three promising stocks from three distinct industries that are currently undervalued, show potential for growth, and offer an appealing dividend yield exceeding 6%.

Acadian Timber Corp (TSX: ADN)

Acadian has carved out a distinctive position within the forest products supply chain, showcasing a diversified presence that sets it apart from competitors. The company is deeply involved in the strategic planning, growth, and sale of trees sourced from its extensive timberland holdings. This diversified supply chain caters to a wide array of customers, including lumber mills and pulp and paper mills, enabling Acadian to reach multiple industries and markets, from infrastructure to paper products, as well as various rubber and consumer goods. This strong market position has fostered a track record of resilient financial performance and earnings growth, culminating in consistent dividend payouts and an attractive dividend yield of 6.59%. Furthermore, Acadian’s valuations have seen significant improvement, with a P/E ratio now at 9.44x, a notable enhancement from the 17.13x peak experienced a few years ago.

Headwater Exploration Inc. (TSX: HWX)

Headwater Exploration stands out as a compelling and often overlooked investment opportunity, showcasing remarkable financial growth in recent years through its oil and natural gas ventures. The company is actively working to boost its inventory levels, setting the stage for significant production increases in the future. Following a strong growth trajectory, Headwater has ramped up its production from an average of 7,393 barrels of oil per day in 2021 to an impressive 18,018 barrels per day in 2023. Additionally, this stock boasts an appealing yield of 6.05%, and with a healthy P/E ratio of 8.46x, it presents a promising outlook for further enhancement in its valuation metrics.

MCAN Mortgage Corporation (TSX: MKP)

This security truly shines with its impressive dividend yield of 8.76%, coupled with a remarkable track record of consistent dividend payments and growth. This combination not only establishes a solid foundation but also presents enticing prospects for nearly double-digit annual returns for investors. Furthermore, these returns are underpinned by robust financial performances and growth in recent years, culminating in an appealing P/E ratio of 7.80x. The recent announcement of a 50 basis point rate cut further complements the company’s growth trajectory as it is anticipated to enhance lending activity and drive revenue growth for the company.