3 Cheap Stocks to Add to Your Portfolio Today

Are you looking for a value play? If so, take a look at Open Text Corporation (TSX:OTC)(NYSE:OTEX), Cogeco Cable Inc. (TSX:CCA), and Constellation Software Inc. (TSX:CSU).

| More on:
The Motley Fool

As many investors have come to know, finding the right stock at the right price is a difficult task. To make things easier I have compiled a list of three stocks that are trading at inexpensive forward valuations compared with their five-year averages, so let’s take a closer look at each to determine which one would fit best in your portfolio.

1. Open Text Corporation

Open Text Corporation (TSX:OTC)(NASDAQ:OTEX) is one of the world’s largest providers of enterprise information management. At today’s levels, its stock trades at just 15.1 times fiscal 2015’s estimated earnings per share of $3.45 and only 14 times fiscal 2016’s estimated earnings per share of $3.73, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 29.4. In addition, the company pays a quarterly of $0.20 per share, or $0.80 per share annually, giving its stock a 1.5% yield.

2. Cogeco Cable Inc.

Cogeco Cable Inc. (TSX:CCA) is the 11th-largest cable operator in North America and one of the largest in Canada. At current levels, its stock trades at just 12.8 times fiscal 2015’s estimated earnings per share of $5.29 and only 12.6 times fiscal 2016’s estimated earnings per share of $5.39, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 13.2. Additionally, the company pays a quarterly dividend of $0.35 per share, or $1.40 per share annually, which gives its stock a 2.05% yield.

3. Constellation Software Inc.

Constellation Software Inc. (TSX:CSU) is one of the world’s leading providers of software and related services to businesses in both the private and public sectors. At today’s levels, its stock trades at just 31.9 times fiscal 2015’s estimated earnings per share of $16.18 and only 26.6 times fiscal 2016’s estimated earnings per share of $19.39, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 38.1. In addition, the company pays a quarterly dividend of $1.00 per share, or $4.00 per share annually, giving its stock a 0.8% yield.

Which of these three stocks should you buy today?

Open Text, Cogeco Cable, and Constellation Software are three of the top value plays in the market. Foolish investors should take a closer look and strongly consider initiating long-term positions in at least one of them.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joseph Solitro has no position in any stocks mentioned. The Motley Fool owns shares of Open Text.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »

sale discount best price
Dividend Stocks

1 Dividend Stock Down 11 Percent to Buy Right Now

Do you want a great dividend stock down 11% that can provide years of growth potential? Here's one heavily discounted…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Are you looking for dividend stocks to buy right now? Here are two top picks!

Read more »

edit Taxes CRA
Dividend Stocks

Tax Time: How to Keep More of Your Money

Nearly everyone hates paying taxes, although Canadians can lessen the financial pain with the right tax strategies.

Read more »