As many of you have come to know, finding the right stock at the right price is a very difficult task. In order 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. George Weston Limited
George Weston Limited (TSX: WN) is the largest processor and distributor of food in Canada. At today’s levels, its stock trades at just 17.7 times fiscal 2015’s estimated earnings per share of $5.75 and only 15.3 times fiscal 2016’s estimated earnings per share of $6.66, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 27.7. In addition, the company pays a quarterly dividend of $0.425 per share, or $1.70 per share annually, giving its stock a 1.7% yield at today’s levels.
2. Magellan Aerospace Corp.
Magellan Aerospace Corp. (TSX: MAL) is one of the largest integrated aerospace companies in North America and Europe. At current levels, its stock trades at just 13.7 times fiscal 2015’s estimated earnings per share of $1.29 and only 12.4 times fiscal 2016’s estimated earnings per share of $1.43, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 14.4. Additionally, the company pays a quarterly dividend of $0.055 per share, or $0.22 per share annually, which gives its stock a 1.2% yield at today’s levels.
3. Leon’s Furniture Ltd.
Leon’s Furniture Ltd. (TSX: LNF) is the largest retailer of home furnishings in Canada. At today’s levels, its stock trades at just 15.1 times fiscal 2015’s estimated earnings per share of $1.03 and only 13.9 times fiscal 2016’s estimated earnings per share of $1.12, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 16.9. In addition, the company pays a quarterly dividend of $0.10 per share, or $0.40 per share annually, giving its stock a 2.6% yield at current levels.
Which of these cheap stocks belong in your portfolio?
George Weston, Magellan Aerospace, and Leon’s Furniture are three of the most attractive investment options in the market. Foolish investors should take a closer look and consider establishing positions in at least one of them.
