As many investors know, finding a stock that can provide both growth and dividend income can be a very difficult task. In order to make things easier, I have compiled a list of three dividend-paying stocks that are trading at inexpensive 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. National Bank of Canada
National Bank of Canada (TSX: NA) is one of the largest financial institutions in Canada, with approximately $207.2 billion in total assets. At today’s levels, its stock trades at 10 times fiscal 2015’s estimated earnings per share of $4.67 and 9.5 times fiscal 2016’s estimated earnings per share of $4.92, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 10.2. In addition, the company pays a quarterly dividend of $0.52 per share, or $2.08 per share annually, giving its stock a 4.4% yield.
2. DH Corp.
DH Corp. (TSX:DH) is one of the leading providers of financial technology to the world’s financial institutions. At current levels, its stock trades at 16.6 times fiscal 2015’s estimated earnings per share of $2.40 and 15.4 times fiscal 2016’s estimated earnings per share of $2.60, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 18.6. Additionally, the company pays a quarterly dividend of $0.32 per share, or $1.28 per share annually, which gives its stock a 3.2% yield
3. Superior Plus Corp.
Superior Plus Corp. (TSX: SPB) owns a portfolio of diversified businesses consisting of propane distribution, specialty chemicals, construction products distribution, and fixed-price energy services. At today’s levels, its stock trades at 23.3 times fiscal 2015’s estimated earnings per share of $0.54 and 10.6 times fiscal 2016’s estimated earnings per share of $1.18, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 114.4. In addition, the company pays a monthly dividend of $0.06 per share, of $0.72 per share annually, giving its stock a 5.7% yield.
Which stock should you buy today?
National Bank of Canada, DH Corp., and Superior Plus Corp. are three very inexpensive dividend-paying investment options in the market today. Foolish investors with cash on the sidelines should take a closer look and consider establishing positions in at least one of them.
