As many investors have come to know, finding the right stock at the right price is a difficult task, and it is even more difficult to find a stock that can offer both growth and dividend income. To make things easier, I have compiled a list of three dividend-paying 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. Toronto-Dominion Bank
Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is the second-largest bank in Canada, with $1.03 trillion in total assets. At today’s levels, its stock trades at 12 times fiscal 2015’s estimated earnings per share of $4.55 and 11.3 times fiscal 2016’s estimated earnings per share of $4.82, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 13.7. 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. Saputo Inc.
Saputo Inc. (TSX:SAP) is the largest dairy processor in Canada and one of the 10 largest in the world. At current levels, its stock trades at 20.5 times fiscal 2015’s estimated earnings per share of $1.54 and 18.8 times fiscal 2016’s estimated earnings per share of $1.68, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 20.7. Additionally, the company pays a quarterly dividend of $0.13 per share, or $0.52 per share annually, which gives its stock a 1.6% yield.
3. Rogers Sugars Inc.
Rogers Sugars Inc. (TSX:RSI) is one of the largest manufacturers and distributors of sugar products in Canada. At today’s levels, its stock trades at 14.1 times fiscal 2015’s estimated earnings per share of $0.33 and 13.3 times fiscal 2016’s estimated earnings per share of $0.35, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 14.5. In addition, the company pays a quarterly dividend of $0.09 per share, or $0.36 per share annually, giving its stock a 7.7% yield.
Does your portfolio need a source of growth and income?
Toronto-Dominion Bank, Saputo, and Rogers Sugars are three very inexpensive dividend-paying investment options. Foolish investors seeking both growth and income should take a closer look and strongly consider establishing positions in at least one of them today.
