MENU

First Brexit… then Trump… Now, it’s time for Pro

Is your portfolio really prepared for what’s coming next?

To help investors like you navigate this historically uncertain — yet high-flying — market and prepare for an inevitable downturn, we’re re-opening our Motley Fool Pro Canada service to a select few new members for a short time.

To discover how Pro Canada could help you to increase your upside potential… reduce your downside risk… and earn paycheque-like income in the process, simply click here — before the small number of spots we have left are all gone!

3 Stocks for the Value-Obsessed Investor

As value-obsessed investors, we are always on the lookout for high-quality companies whose stocks are trading at discounts compared with their recent averages. Well, I have scoured the market and found three prime investment options from three different industries, so let’s take a quick look at each to determine if you should buy one of them today.

1. Toronto-Dominion Bank

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is the largest bank in Canada with approximately $1.1 trillion in total assets.

At today’s levels, its stock trades at just 11.9 times fiscal 2015’s estimated earnings per share of $4.59 and only 11.3 times fiscal 2016’s estimated earnings per share of $4.83, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 13.2 and its industry average multiple of 12.9.

I think TD Bank’s stock could consistently trade at a fair multiple of at least 13, which would place its shares upwards of $62 by the conclusion of fiscal 2016, representing upside of more than 13% from current levels.

In addition, the company pays a quarterly dividend of $0.51 per share, or $2.04 per share annually, giving its stock a 3.75% yield.

2. Industrial Alliance Insurance and Financial Services Inc.

Industrial Alliance Insur. & Fin. Ser. (TSX:IAG) is one of the largest providers of life and health insurance products in Canada.

At current levels, its stock trades at just 11.7 times fiscal 2015’s estimated earnings per share of $3.63 and only 9.8 times fiscal 2016’s estimated earnings per share of $4.34, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 14.7 and its industry average multiple of 24.3.

I think Industrial Alliance’s stock could consistently trade at a fair multiple of at least 12, which would place its shares upwards of $52 by the conclusion of fiscal 2016, representing upside of more than 22% from current levels.

Additionally, the company pays a quarterly dividend of $0.30 per share, or $1.20 per share annually, giving its stock a 2.8% yield.

3. Stantec Inc.

Stantec Inc. (TSX:STN)(NYSE:STN) is one of the world’s leading providers of architectural, engineering, and environmental services.

At today’s levels, its stock trades at just 18.4 times fiscal 2015’s estimated earnings per share of $1.83 and only 16 times fiscal 2016’s estimated earnings per share of $2.11, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 59.9 and its industry average multiple of 25.3.

I think Stantec’s stock could consistently trade at a fair multiple of at least 20, which would place its shares upwards of $42 by the conclusion of fiscal 2016, representing upside of more than 24% from current levels.

Also, the company pays a quarterly dividend of $0.105 per share, or $0.42 per share annually, giving its stock a 1.2% yield.

Does your portfolio need more value?

Toronto-Dominion Bank, Industrial Alliance, and Stantec are three of the top value plays in their respective industries. All Foolish investors should strongly consider beginning to scale in to long-term positions in at least one of them today.

Five more value plays for your watch list

For a look at five top Canadian companies that won't let you down, click here now to download our special FREE report, "Stop Following Bad Advice. Buy These 5 Companies Instead!".

Fool contributor Joseph Solitro has no position in any stocks mentioned.

NEW! This Stock Could Be Like Buying Amazon In 1997

For only the 5th time in over 14 years, Motley Fool co-founder David Gardner just issued a Buy Recommendation on this recent Canadian IPO.

Stock Advisor Canada’s Chief Investment Adviser, Iain Butler, also recommended this company back in March – and it’s already up a whopping 57%!

Enter your email address below to claim your copy of this brand new report, “Breakthrough IPO Receives Rare Endorsement.”

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.