As most investors have realized, finding the right stock at the right price is not an easy task. It is even harder to find a stock that can provide both growth and dividend income. Well, to make things easier for you, I have scoured the market and 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. Progressive Waste Solutions Ltd.
Progressive Waste Solutions Ltd. (TSX:BIN)(NYSE:BIN) is one of North America’s largest providers of waste management solutions. At today’s levels, its stock trades at 25.5 times fiscal 2015’s estimated earnings per share of $1.28 and 21.9 times fiscal 2016’s estimated earnings per share of $1.49, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 29.1. In addition, the company pays a quarterly dividend of $0.16 per share, or $0.64 per share annually, giving its stock a 2% yield.
2. Macdonald Dettwiler & Associates Ltd.
Macdonald Dettwiler & Associates Ltd. (TSX:MDA) is a global communications and information company, providing operational solutions to commercial and government organizations worldwide. At current levels, its stock trades at 14.2 times fiscal 2015’s estimated earnings per share of $6.40 and 12.4 times fiscal 2016’s estimated earnings per share of $7.29, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 22.8. Additionally, the company pays a quarterly dividend of $0.37 per share, or $1.48 per share annually, which gives its stock a 1.6% yield.
3. Royal Bank of Canada
Royal Bank of Canada (TSX:RY)(NYSE:RY) is the largest bank in Canada with over $1.03 trillion in total assets. At today’s levels, its stock trades at 11.6 times fiscal 2015’s estimated earnings per share of $6.63 and 11 times fiscal 2016’s estimated earnings per share of $6.96, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 13.6. Also, the company pays a quarterly dividend of $0.77 per share, or $3.08 per share annually, giving its stock a 4% yield.
Could your portfolio use one of these stocks?
Progressive Waste Solutions, Macdonald Dettwiler & Associates, and Royal Bank of Canada are three of the top value plays in the market today. Foolish investors seeking growth and income should take a closer look and strongly consider buying one or all of them.
