As investors know, finding the right stock at the right price can be a very difficult task, but the recent downturn in the market has created a plethora of buying opportunities, especially in the food products industry. Let’s take a closer look at three stocks that are now trading at very inexpensive valuations compared with both their five-year and industry averages to determine which would be the best fit for your portfolio.
1. High Liner Foods Inc.
High Liner Foods Inc. (TSX: HLF) is one of the largest processors of frozen seafood in North America. At today’s levels, its stock trades at 13.5 times fiscal 2015’s estimated earnings per share of $1.33 and 10.9 times fiscal 2016’s estimated earnings per share of $1.65, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 51.4 and the industry average multiple of 22.3. In addition, the company pays a quarterly dividend of $0.12 per share, or $0.48 per share annually, giving its stock a 2.7% 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 19.5 times fiscal 2016’s estimated earnings per share of $1.52 and 17.4 times fiscal 2017’s estimated earnings per share of $1.71, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 20.7 and the industry average multiple of 22.3. Also, the company pays a quarterly dividend of $0.135 per share, or $0.54 per share annually, which gives its stock a 1.8% yield.
3. AGT Food and Ingredients Inc.
AGT Food and Ingredients Inc. (TSX: AGT) is one of the largest suppliers of value-added pulses, staple foods, and food ingredients in the world. At today’s levels, its stock trades at 16.8 times fiscal 2015’s estimated earnings per share of $1.71 and 13.2 times fiscal 2016’s estimated earnings per share of $2.17, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 36.2 and the industry average multiple of 22.3. Additionally, the company pays a quarterly dividend of $0.15 per share, or $0.60 per share annually, giving its stock a 2.1% yield.
Which of these food stocks fit your portfolio’s needs?
High Liner Foods, Saputo, AGT Food and Ingredients are three of the top value plays in the food products industry today. All Foolish investors should take a closer look and consider initiating positions in one of them.
