Editor’s note: The Agrium section of this article has been updated from its original version with data that reflects a current stock price in USD. The original version quoted the share price in CAD and calculated forward P/E ratios and potential upside using this figure.
As Foolish 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 at two stocks trading in the triple-digits that are worth every penny, so you can determine if you should buy one of them today.
1. Morguard Corporation: $149.00 per share
Morguard Corporation (TSX:MRC) is a fully integrated real estate company. It owns and manages a portfolio of commercial and residential properties, provides real estate advisory services and portfolio management services, and owns a significant interest in two real estate investment trusts.
At today’s levels, its stock trades at just 13.3 times fiscal 2015’s estimated earnings per share of $11.23 and only 10.8 times fiscal 2016’s estimated earnings per share of $13.74, both of which are inexpensive compared with its trailing 12-month price-to-earnings multiple of 16.8 and its industry average multiple of 18.5.
I think Morguard’s stock could consistently command a fair multiple of at least 15, which would place its shares upwards of $206 by the conclusion of fiscal 2016, representing upside of more than 38% from current levels.
In addition, the company pays a quarterly dividend of $0.15 per share, or $0.60 per share annually, giving its stock a 0.4% yield.
2. Agrium Inc.: $93.92 per share
(All figures are in U.S. dollars)
At current levels, its stock trades at just 13.2 times fiscal 2015’s estimated earnings per share of $7.13 and only 11.7 times fiscal 2016’s estimated earnings per share of $8.02, both of which are inexpensive compared with its industry average price-to-earnings multiple of 19 and with AGU’s trailing 12-month multiple of 16.1.
I think Agrium’s stock could consistently command a fair multiple of at least 18, which would place its shares upwards of $144 by the conclusion of fiscal 2016, representing upside of more than 53.3% from today’s levels.
Additionally, the company pays a quarterly dividend of $0.875 per share, or $3.50 per share annually, which gives its stock a 3.7% yield.
Should you buy one of these triple-digit stocks today?
Morguard and Agrium may have triple-digit stock prices, but they are both worth every penny. Foolish investors should strongly consider initiating positions in one of them today.