3 Cheap Dividend-Paying Stocks I’d Buy With an Extra $5,000

Looking for a cheap stock? SNC-Lavalin Group Inc. (TSX:SNC), Peyto Exploration & Development Corp. (TSX:PEY), and Canam Group Inc. (TSX:CAM) could be what you need.

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Finding the right stock at the right price can be a very difficult task. This we can all agree on. In order to make things easier for you, 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. SNC-Lavalin Group Inc.

SNC-Lavalin Group Inc. (TSX:SNC) is one of the world’s largest engineering and construction companies. At today’s levels, its stock trades at 20.6 times fiscal 2015’s estimated earnings per share of $2.11 and 14.8 times fiscal 2016’s estimated earnings per share of $2.94, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 43.7. In addition, the company pays a quarterly dividend of $0.25 per share, or $1.00 per share annually, giving its stock a 2.3% yield.

2. Peyto Exploration & Development Corp.

Peyto Exploration & Development Corp. (TSX:PEY) is one of the largest explorers and producers of unconventional natural gas in Alberta, Canada. At current levels, its stock trades at 28.1 times fiscal 2015’s estimated earnings per share of $1.11 and 21.7 times fiscal 2016’s estimated earnings per share of $1.44, the latter of which is inexpensive compared with its five-year average price-to-earnings multiple of 26.5. Additionally, the company pays a monthly dividend of $0.11 per share, or $1.32 per share annually, which gives its stock a 4.2% yield.

3. Canam Group Inc.

Canam Group Inc. (TSX:CAM) is the largest fabricator of steel components in North America. At today’s levels, its stock trades at 12.9 times fiscal 2015’s estimated earnings per share of $1.07 and 10.5 times fiscal 2016’s estimated earnings per share of $1.32, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 26. In addition, the company pays a quarterly dividend of $0.04 per share, or $0.16 per share annually, giving its stock a 1.15% yield.

Does one of these stocks belong in your portfolio?

SNC-Lavalin Group, Peyto Exploration, and Canam Group are three very inexpensive investment options in the market today. Foolish investors should strongly consider establishing positions in one of them.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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

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