Worth investing is a method that includes figuring out high quality corporations buying and selling at a reduction to their intrinsic worth. Usually, undervalued shares are priced at a horny a number of and positioned to ship market-beating returns as investor sentiment improves.

On this article, I’ve recognized one such undervalued Canadian inventory you should purchase in November 2025. Valued at a market cap of $4.7 billion, West Fraser Timber (TSX:WFG) is down virtually 40% from all-time highs, permitting you to purchase the dip.

West Fraser Timber is a diversified Canadian wooden merchandise producer that produces lumber, engineered wooden merchandise, pulp, and newsprint. West Fraser serves main retail chains, wholesalers, and industrial clients throughout North America, Europe, and internationally for residence building, restore, paper merchandise, and industrial purposes.

Let’s see if WFG inventory is an efficient purchase proper now.

Is that this Canadian inventory undervalued in November 2025?

West Fraser Timber’s sturdy steadiness sheet allowed it to navigate a difficult Q3. The Canadian lumber big exited the third quarter with US$1.6 billion in obtainable liquidity and US$212 million in money, which gives it with flexibility amid near-term headwinds.

Administration’s decisive early-cycle actions have basically strengthened the corporate’s aggressive positioning. West Fraser eliminated 820 million board toes of capability during the last three years, accounting for 12% of complete lumber manufacturing functionality. An optimized portfolio eliminates high-cost operations whereas concurrently buying premium lumber and OSB (oriented strand board) property.

The corporate’s balanced capital allocation technique continues to ship shareholder worth even throughout tough market situations. West Fraser deployed US$65 million towards share buybacks and dividends within the third quarter whereas investing US$90 million in strategic capital tasks that may drive prices decrease as they develop into operational.

The Henderson mill alternative challenge is coming into its commissioning section, which is anticipated to drive effectivity upgrades that may improve margins when market situations enhance.

North American lumber provide has been trending structurally decrease as excessive fibre prices, legacy expertise, and elevated duties drive everlasting capability closures throughout the business.

West Fraser’s trendy, well-capitalized asset base and entry to economically viable timber provide positions it to seize disproportionate market share when housing demand recovers. New materials provide additions face substantial obstacles, together with scarce fibre entry, prohibitive capital prices, and restricted residual product retailers.

Early indicators of enchancment are rising in European operations, the place OSB demand and pricing have proven sequential quarter-over-quarter beneficial properties.

The corporate’s geographic and product diversification gives pure hedges in opposition to regional weak spot whereas sustaining publicity to a number of restoration catalysts. With U.S. housing begins averaging simply 1.3 million models by means of August, substantial pent-up demand continues to construct.

Why is the TSX inventory undervalued?

Analysts monitoring West Timber inventory forecast gross sales to say no from US$6.2 billion in 2024 to US$5.5 billion in 2025. The corporate is forecast to report a loss per share of US$3.86 in 2025, in comparison with earnings per share (EPS) of US$1.20 in 2024. Nonetheless, analysts forecast income to extend to $7.1 billion in 2029 whereas adjusted EPS is projected at $8.52.

The timber big can be anticipated to report free money stream of US$912 million in 2029, in comparison with a $252 million outflow this 12 months. If the TSX inventory is priced at 10 occasions ahead FCF, it might surge over 100% throughout the subsequent 45 months.

West Timber can be forecast to pay shareholders an annual dividend of US$1.28 in 2025, which interprets to a yield of two.2%. Given its excellent share depend, West Timber’s annual dividend expense is round US$100 million, indicating a payout ratio of lower than 50% for 2026.

West Fraser’s investment-grade steadiness sheet, optimized asset portfolio, and operational self-discipline place the corporate to generate distinctive returns when mortgage charges reasonable and housing exercise normalizes.