3 Stocks to Add Value to Your Portfolio

Gildan Activewear Inc. (TSX:GIL)(NYSE:GIL), Exco Technologies Limited (TSX:XTC), and Manulife Financial Corp. (TSX:MFC)(NYSE:MFC) are great value plays today. Which should you buy?

| More on:
The Motley Fool

As investors know, finding the right stock at the right price can be a very difficult task, especially in today’s volatile times. In order to make things easier for you, I have done the groundwork and found three stocks that are trading at inexpensive forward valuations, so let’s take a look and find out which is the best fit for your portfolio.

1. Gildan Activewear Inc.

(All figures are in U.S. dollars) 

Gildan Activewear Inc. (TSX: GIL)(NYSE: GIL) is one of world’s largest manufacturers and distributors of branded apparel, including T-shirts, fleece, sport shirts, underwear, socks, and shapewear.

At today’s levels, its stock trades at 25.6 times fiscal 2015’s estimated earnings per share of $1.51 and 20.3 times fiscal 2016’s estimated earnings per share of $1.91, both of which are inexpensive compared with its trailing-12-month price-to-earnings multiple of 30.8 and its industry average multiple of 31.7.

I think Gildan’s stock could consistently command a fair multiple of at least 28, which would place its shares upwards of $53 by the conclusion of fiscal 2016, representing upside of more than 36% from current levels.

In addition, the company pays a quarterly dividend of $0.065 per share, or $0.26 per share annually, giving its stock a 0.9% yield.

2. Exco Technologies Limited

Exco Technologies Limited (TSX: XTC) is one of the world’s leading manufacturers of dies, moulds, equipment, components, and assemblies to the die-cast, extrusion, and automotive industries.

At current levels, its stock trades at 14.8 times fiscal 2015’s estimated earnings per share of $0.98 and 11.8 times fiscal 2016’s estimated earnings per share of $1.23, both of which are inexpensive compared with its trailing-12-month price-to-earnings multiple of 16 and its industry average multiple of 17.8.

I think Exco’s stock could consistently command a fair multiple of at least 16, which would place its shares upwards of $19 by the conclusion of fiscal 2016, representing upside of more than 31% from today’s levels.

Additionally, the company pays a quarterly dividend of $0.06 per share, or $0.24 per share annually, which gives its stock a 1.7% yield.

3. Manulife Financial Corp.

Manulife Financial Corp. (TSX: MFC)(NYSE: MFC) is one of the largest financial services companies in Asia, Canada, and the U.S., and it is the company behind John Hancock Financial, which operates in the U.S.

At today’s levels, its stock trades at 12 times fiscal 2015’s estimated earnings per share of $1.79 and 10.4 times fiscal 2016’s estimated earnings per share of $2.06, both of which are inexpensive compared with its trailing-12-month price-to-earnings multiple of 13.7 and its industry average multiple of 23.8.

I think Manulife’s stock could consistently command a fair multiple of at least 14, which would place its shares upwards of $28 by the conclusion of fiscal 2016, representing upside of more than 30% from current levels.

In addition, the company pays a quarterly dividend of $0.17 per share, or $0.68 per share annually, giving its stock a 3.2% yield.

Could your portfolio use one of these value plays?

Gildan Activewear, Exco Technologies, and Manulife Financial are three of the top value plays in their respective industries, and all have the added benefit of dividends. Foolish investors should take a closer look and consider establishing positions in one or more of them.

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

More on Investing

Agricultural harvesting at the last light of day, aerial view.
Dividend Stocks

Potash Power Play: Why This Overlooked Commodity Could Be Canada’s Trump Card

Canada’s potash dominance gives Nutrien a strategic edge as trade tensions rise, making this overlooked commodity worth watching closely.

Read more »

gold prices rise and fall
Dividend Stocks

Trade War 2.0: The TSX Stocks That Could Actually Benefit From U.S. Tariffs

These two TSX stocks could give investors great ways to benefit from Trade War 2.0.

Read more »

senior man and woman stretch their legs on yoga mats outside
Energy Stocks

Retirees Love Dividends: Here’s the Number That Matters More Than Yield

A tempting 7% yield can vanish fast, so checking the payout ratio helps confirm a dividend is actually sustainable.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

A 6% Yield Won’t Save a Weak Dividend: I’d Buy This Growing Payout Instead

A lower 3.3% yield can beat a 6% yield over time if the dividend keeps growing, and Manulife is showing…

Read more »

c
Stocks for Beginners

You Don’t Need a Million-Dollar Salary to Build a Million-Dollar TFSA

A million-dollar TFSA is built with ordinary annual contributions and decades of compounding, not an extraordinary salary.

Read more »

infrastructure like highways enables economic growth
Dividend Stocks

A $7,000 TFSA Contribution Could Become $70,000: Here’s the Math

A single $7,000 TFSA contribution can grow into $70,000 over decades if you pair time with a durable grower like…

Read more »

investor looks at volatility chart
Dividend Stocks

Buy the Dip: 2 TSX Dividend Stocks to Own for Passive Income

These stocks now offer yields well above 5%.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

The First $100,000 Is the Hardest: Here’s How a TFSA Can Do the Rest

Hit $100,000 in a TFSA and compounding can start doing more work than your annual contributions.

Read more »