3 Stocks to Buy for Value and Yield

Are you in search of a high-yielding value play? If so, First National Financial Corp. (TSX:FN), Premium Brands Holdings Corp. (TSX:PBH), and WSP Global Inc. (TSX:WSP) are perfect options.

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As Foolish investors know, finding the right stock at the right price can be a very difficult task, especially if you’re looking for one that can provide both growth and dividend income. Well, to makes things easier for you, I have scoured the market and found three dividend-paying stocks that are trading at inexpensive forward valuations, so let’s take a quick look at each to determine if you should buy one of them today.

1. First National Financial Corp.

First National Financial Corp. (TSX:FN) is Canada’s largest non-bank lender, offering both commercial and residential mortgage solutions.

At today’s levels, its stock trades at just 11.6 times fiscal 2015’s estimated earnings per share of $1.96 and only 9.3 times fiscal 2016’s estimated earnings per share of $2.45, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 11.9.

I think First National’s stock could consistently trade at a fair multiple of at least 11, which would place its shares around $27 by the conclusion of fiscal 2016, representing upside of more than 18% from current levels.

Also, it pays a monthly dividend of $0.129167 per share, or $1.55 per share annually, giving its stock a 6.8% yield.

2. Premium Brands Holdings Corp.

Premium Brands Holdings Corp. (TSX:PBH) is one of the largest owners and operators of specialty food manufacturing and differentiated food distribution businesses in North America.

At today’s levels, its stock trades at just 21.1 times fiscal 2015’s estimated earnings per share of $1.80 and only 17.4 times fiscal 2016’s estimated earnings per share of $2.18, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 36.9.

I think Premium Brands’s stock could consistently trade at a fair multiple of at least 20, which would place its shares upwards of $43 by the conclusion of fiscal 2016, representing upside of more than 13% from current levels.

In addition, the company pays a quarterly dividend of $0.345 per share, or $1.38 per share annually, giving its stock a 3.6% yield.

3. WSP Global Inc.

WSP Global Inc. (TSX:WSP) is one of the world’s leading professional services firms, providing engineering and design services to several industries.

At today’s levels, its stock trades at just 20.5 times fiscal 2015’s estimated earnings per share of $2.20 and only 16.6 times fiscal 2016’s estimated earnings per share of $2.72, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 27.8.

I think WSP’s stock could consistently trade at a fair multiple of at least 20, which would place its shares upwards of $54 by the conclusion of fiscal 2016, representing upside of more than 19% from current levels.

Additionally, the company pays a quarterly dividend of $0.375 per share, or $1.50 per share annually, giving its stock a 3.3% yield.

Which of these stocks fit your portfolio’s needs?

First National Financial, Premium Brands, and WSP Global can add value and dividend income to your portfolio. All Foolish investors should 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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