2 Triple-Digit Stocks Worth Every Penny: Part 2

Constellation Software Inc. (TSX:CSU) and George Weston Limited (TSX:WN) may have high stock prices, but they are well worth it. Which should you buy today?

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As wise investors know, the price of a stock does not matter because the fundamentals, such as its valuations and its dividend yield, are what make it a buy or sell. With this in mind, let’s take a look at two stocks trading in the triple digits that are worth every penny, so you can decide if you should add one of them to your portfolio today.

1. Constellation Software Inc.: $532.25 per share

(All figures are in U.S. dollars)

Constellation Software Inc. (TSX:CSU) is one of the world’s leading providers of software and related services to businesses in both the private and public sectors.

At today’s levels, its stock trades at just 33.2 times fiscal 2015’s estimated earnings per share of $16.02 and only 27.6 times fiscal 2016’s estimated earnings per share of $19.29, both of which are inexpensive compared with its trailing 12-month price-to-earnings multiple of 64.5 and its five-year average multiple of 38.4.

I think Constellation’s stock could consistently trade at a fair multiple of at least 40, which would place its shares upwards of $771 by the conclusion of fiscal 2016, representing upside of more than 44% from current levels.

In addition, the company pays a quarterly dividend of $1.00 per share, or $4.00 per share annually, giving its stock a 1% yield. Investors should also note that it has maintained this quarterly rate since it began paying a dividend in April 2012.

2. George Weston Limited: $106.47 per share

George Weston Limited (TSX:WN) is the largest food processor and distributor in Canada, and it is the company behind Loblaw Companies Limited and Weston Foods.

At current levels, its stock trades at just 18.4 times fiscal 2015’s estimated earnings per share of $5.80 and only 15.5 times fiscal 2016’s estimated earnings per share of $6.87, both of which are inexpensive compared with its trailing 12-month price-to-earnings multiple of 35.5 and its five-year average multiple of 27.1.

I think George Weston’s stock could consistently trade at a fair multiple of at least 20, which would place its shares upwards of $137 by the conclusion of fiscal 2016, representing upside of over 28% from today’s levels.

In addition, the company pays a quarterly dividend of $0.425 per share, or $1.70 per share annually, which gives its stock a 1.6% yield. It is also very important to note that the company has increased its dividend for three consecutive years.

Should you buy one of these triple-digit stocks today?

Constellation Software and George Weston are both trading in the triple digits, but they are well worth it. Foolish investors should focus on the fundamentals and strongly consider initiating positions in at least one of them today.

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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