As many investors know, finding the right stock at the right price can be very difficult task, but the recent downturn in the market has created numerous opportunities. Let’s take a look at three stocks that are now trading at inexpensive valuations compared with both their industry and five-year averages, so you can decide which would be the best fit for your portfolio.
1. Canadian Pacific Railway Limited
Canadian Pacific Railway Limited (TSX:CP)(NYSE:CP) is one of the largest rail network operators in North America. At today’s levels, its stock trades at 19 times fiscal 2015’s estimated earnings per share of $10.31 and 16.3 times fiscal 2016’s estimated earnings per share of $12.05, both of which are inexpensive compared with its industry average price-to-earnings multiple of 22.7 and its five-year average multiple of 25.7.
In addition, Canadian Pacific pays a quarterly dividend of $0.35 per share, or $1.40 per share annually, giving its stock a 0.7% yield.
2. TMX Group Limited
TMX Group Limited (TSX:X) operates cash and derivative markets for multiple asset classes, including equities, fixed income, and energy, while also providing clearing facilities, data products, and related services to the world’s financial institutions.
At current levels, its stock trades at 12.8 times fiscal 2015’s estimated earnings per share of $3.73 and 11.5 times fiscal 2016’s estimated earnings per share of $4.16, both of which are inexpensive compared with its industry average price-to-earnings multiple of 25.2 and its five-year average multiple of 25.3.
Also, TMX Group pays a quarterly dividend of $0.40 per share, or $1.60 per share annually, which gives its stock a 3.35% yield.
3. First Quantum Minerals Ltd.
First Quantum Minerals Ltd. (TSX:FM) is one of world’s largest producers of copper, nickel, and other metals. At today’s levels, its stock trades at 19.1 times fiscal 2015’s estimated earnings per share of US$0.33 and 6.5 times fiscal 2016’s estimated earnings per share of US$0.97, both of which are inexpensive compared with its industry average price-to-earnings multiple of 20 and the latter of which is inexpensive compared with its five-year average multiple of 15.7.
Additionally, First Quantum pays a semi-annual dividend of $0.033 per share, or $0.066 per share annually, giving its stock a 1% yield.
Should you buy one of these stocks today?
Canadian Pacific, TMX Group, and First Quantum Minerals are three of the top value plays in their respective industries, and all have the added benefit of dividends. All long-term investors should take a closer look and consider buying at least one of them today.
