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Fool Canada’s first 1,000%+ winner?

Our Chief Investment Advisor, Iain Butler, and a team of The Motley Fool’s most talented investors from across the globe recently embarked on an unprecedented mission:

To identify the 20 Canadian small-cap companies they believe have the best shot at earning investors like you gains of 1,000%+ over the coming years.

For the next few days only, you can get the names and full details on these 20 potential “10-baggers” when you join Iain and his team in a first-of-its-kind project they have dubbed Discovery Canada 2017.

3 Cheap Stocks to Add to Your Buy List

If you’re in search of an undervalued stock to add to your portfolio, then you’ve come to the right place. I’ve compiled a list of three stocks that are trading at inexpensive valuations compared with both their five-year and industry averages, so let’s take a quick look at each to determine if you should buy one of them today.

1. Loblaw Companies Limited

Loblaw Companies Limited (TSX:L) is the largest owner and operator of grocery stores and pharmacies in Canada with more than 2,400 locations across the country.

At today’s levels, its stock trades at just 18.1 times fiscal 2016’s estimated earnings per share of $3.90 and only 16.1 times fiscal 2017’s estimated earnings per share of $4.38, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 161.4 and its industry average multiple of 25.8. These multiples are also inexpensive given the company’s estimated 13.3% long-term earnings-growth rate.

In addition, Loblaw pays a quarterly dividend of $0.25 per share, or $1.00 per share annually, which gives its stock a yield of about 1.4%. It is also very important to note that the company’s 2% dividend hike in May 2015 has it on pace for fiscal 2016 to mark the fifth consecutive year in which it has raised its annual dividend payment.

2. Quebecor Inc.

Quebecor Inc. (TSX:QBR.B) is a Canadian leader in the telecommunications, media, and entertainment industries, and its subsidiaries include Quebecor, the largest French-language television network in North America, and TVA Network, the most popular television network in Quebec.

At today’s levels, its stock trades at just 15.3 times fiscal 2016’s estimated earnings per share of $2.14 and only 13.1 times fiscal 2017’s estimated earnings per share of $2.50, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 50.4 and its industry average multiple of 22.6. These multiples are also inexpensive given the company’s estimated 19.9% long-term earnings-growth rate.

In addition, Quebecor pays a quarterly dividend of $0.035 per share, or $0.14 per share annually, which gives its stock a yield of about 0.4%. It is also very important to note that the company’s 40% dividend hike in May 2015 has it on pace for fiscal 2016 to mark the second consecutive year in which it has raised its annual dividend payment.

3. Stantec Inc.

Stantec Inc. (TSX:STN)(NYSE:STN) is one of the world’s leading providers of comprehensive professional services in the area of infrastructure and facilities, including planning, engineering, architecture, interior design, surveying, and environmental sciences.

At today’s levels, its stock trades at just 17.7 times fiscal 2016’s estimated earnings per share of $1.91 and only 14.5 times fiscal 2017’s estimated earnings per share of $2.32, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 32.3 and its industry average multiple of 21.7. These multiples are also inexpensive given the company’s estimated 12% long-term earnings-growth rate.

In addition, Stantec pays a quarterly dividend of $0.1125 per share, or $0.45 per share annually, which gives its stock a yield of about 1.3%. It is also very important to note that the company’s 7.1% dividend hike in February has it on pace for fiscal 2016 to mark the fourth consecutive year in which it has raised its annual dividend payment.

4. And this renewable energy stock could be the top buy of them all

Renewable energy is predicted to be the largest source of electricity growth over the next five years. A trend like that is simply too hard for us Fools to ignore. Luckily, we've identified 1 Top Renewable Energy Stock for 2016 - And Beyond that we think Canadian investors should take a much closer look at. If you'd like our full analyst report sent directly to your inbox FOR FREE, then click here right now..."

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 find out how you can claim your copy of this brand new report, “Breakthrough IPO Receives Rare Endorsement.”

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