It’s rare that you see an income-focused company with high growth potential. So when the opportunity does come, it’s best that investors take advantage of it. Due to the recent sell-offs in December, investors are left with a bundle of income companies that are significantly undervalued.

Here are three of them that have piqued my interest to kick off 2019.

TransCanada Corp. (TRP)

TransCanada is an energy company with major interests in gas and liquids pipelines. Its most notable asset is the Keystone pipeline. And unless you’ve been living under a rock, you probably know the controversy the Keystone is causing.

The stock price has fallen from July 2018 highs of $59.41 and currently sits just above the $50 mark. The company has a massive $36 billion dollar development backlog, including its expansion of its Nova Gas Transmission System. The Keystone has faced significant regulatory issues, but if the project does end up going through, it would be a huge bonus for current and prospective investors.

Because of its fall in share price, its yield now sits at a very generous 5.60%. And to add to this, analysts expect a very strong year from the pipeline company in 2019. With a one-year target estimate of $63.76, analysts are giving the company 27% upside potential for 2019.

For its dividend yield alone, TransCanada is a solid investment. The fact that analysts are predicting a 27% upside in share price for 2019 is just icing on the cake. 

The Bank Of Nova Scotia (BNS) 

I recently mentioned The Bank Of Nova Scotia in my best financial stocks in the country article, and for good reason. 

In just the final quarter of 2018, the financial sector lost almost 13% of its value. Fears of the Canadian housing market being a bubble about to burst and rising interest rates bringing concerns of mortgage and loan defaults have brought financial stocks down. But the thing is, banks are in no worse shape. Write-offs remain in line with historical averages.

This has presented an excellent buying opportunity for those who lack exposure to the Canadian financial sector. One of the best, if not the best in my eyes right now is Scotiabank. The company has fallen off September highs of $78 and now trades in the high $60’s.

Giving investors a near 5% yield, the company is already one of the best dividend stocks in the country. To add to this, however, analysts have set a 1-year target estimate of $84.33, which signals a potential upside of 23.5%. Investors looking for exposure to the financial industry would be wise to have a look at BNS, not only for the large short-term upside, but for the long-term benefits. 

Andrew Peller (ADW-A)

Andrew Peller’s dividend yield itself may not look appealing, but if you look deeper, you’ll see there is a ton of room for it to grow. The company has a 13-year dividend growth streak, and the company’s payout ratio is currently only 15.31%.

Andrew Peller is a Canadian wine producer with a wide variety of popular brands. And one huge benefit to investment in ADW is the fact that in poor economic conditions, alcohol consumption actually goes up. The stock is deemed a consumer defensive stock and should be able to weather poor economic conditions better than most.

As beer sales fall and wine sales continue to rise, Andrew Peller should be able to take advantage of this even more than they already have. The company is on pace for yet another record-setting year in terms of sales growth.

The company only pays a 1.6% yield at this moment, but investors sticking with Andrew Peller for the long haul could reap big rewards in terms of dividend growth and stock appreciation. Analysts have declared a 1-year estimate price of $19.58 on Andrew Peller, which gives the stock a whopping 45.4% upside going into 2019.