As long-term investors, we are always on the lookout for high-quality companies whose stocks are trading at discounted levels. Well, I have come across three very attractive options from three different industries, so let’s take a quick look at each to determine if you should buy one of them today.
1. Canadian Utilities Limited
Canadian Utilities Limited (TSX: CU) is one of the largest utilities and energy companies in North America.
At today’s levels, its stock trades at just 17.1 times fiscal 2015’s estimated earnings per share of $1.88 and only 14.6 times fiscal 2016’s estimated earnings per share of $2.21, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 17.9.
I think Canadian Utilities’s stock could consistently command a fair multiple of at least 18, which would place its shares around $40 by the conclusion of fiscal 2016, representing upside of more than 24% from current levels.
In addition, the company pays a quarterly dividend of $0.325 per share, or $1.30 per share annually, which gives its stock a 4% yield.
2. Toronto-Dominion Bank
Toronto-Dominion Bank (TSX: TD)(NYSE: TD) is the largest bank in Canada with approximately $1.1 trillion in total assets.
At today’s levels, its stock trades at just 10.6 fiscal 2016’s estimated earnings per share of $4.83 and a mere 10 times fiscal 2017’s estimated earnings per share of $5.15, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 13.1.
I think Toronto-Dominion’s stock could consistently command a fair multiple of at least 13, which would place its shares around $67 by the conclusion of fiscal 2017, representing upside of more than 30% from current levels.
Also, the company pays a quarterly dividend of $0.51 per share, or $2.04 per share annually, which gives its stock a 4% yield.
3. Open Text Corporation
Open Text Corporation (TSX:OTC)(NASDAQ: OTEX) is one of the world’s leading providers of enterprise information management.
At today’s levels, its stock trades at just 12.7 times 2016’s estimated earnings per share of US$3.56 and only 12.1 times fiscal 2017’s estimated earnings per share of US$3.73, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 27.2.
I think Open Text’s stock could consistently command a fair multiple of at least 15, which would place its shares around $56 by the conclusion of fiscal 2017, representing upside of more than 24% from current levels.
In addition, the company pays a quarterly of US$0.20 per share, or US$0.80 per share annually, which gives its stock a 1.8% yield.
Should one of these stocks be a core holding in your portfolio?
Canadian Utilities, Toronto-Dominion Bank, and Open Text Corporation represent three of the best long-term investment opportunities in their respective industries. All Foolish investors should strongly consider initiating positions in one or more of them today.
