One of the most difficult tasks we face as investors is finding the right stock at the right price when we are ready to make a purchase. In order to make things easier for you, I scoured the market and found three stocks that are trading at major discounts compared with their five-year averages, so let’s take a quick look at each to determine if you should buy one or more of them today.
1. WSP Global Inc.
WSP Global Inc. (TSX:WSP) is one of the world’s largest engineering consulting firms.
At today’s levels, its stock trades at just 18.7 times fiscal 2015’s estimated earnings per share of $2.15 and only 14.7 times fiscal 2016’s estimated earnings per share of $2.74, both of which are inexpensive compared with its five-year average multiple of 27.4.
With its five-year average multiple and its estimated 27.4% earnings growth rate in fiscal 2016 in mind, I think WSP’s stock could consistently command 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 34% from current levels.
Also, the company pays a quarterly dividend of $0.375 per share, or $1.50 per share annually, which gives its stock a yield of about 3.7%.
2. Silver Wheaton Corp.
Silver Wheaton Corp. (TSX:SLW)(NYSE:SLW) is the world’s largest precious metals streaming company.
At today’s levels, its stock trades at just 21.7 times fiscal 2015’s estimated earnings per share of US$0.51 and only 19.8 times fiscal 2016’s estimated earnings per share of US$0.56, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 32.9.
With its five-year average multiple and its estimated 9.8% earnings growth rate in fiscal 2016 in mind, I think Silver Wheaton’s stock could consistently command a fair multiple of at least 25, which would place its shares around $14 by the conclusion of fiscal 2016, representing upside of more than 26% from current levels.
In addition, the company pays a quarterly dividend of US$0.05 per share, or US$0.20 per share annually, which gives its stock a yield of about 1.8%.
3. Finning International Inc.
Finning International Inc. (TSX:FTT) is the world’s largest dealer of Caterpillar equipment, parts, and services.
At today’s levels, its stock trades at just 12.3 times fiscal 2015’s estimated earnings per share of $1.42 and only 11.9 times fiscal 2016’s estimated earnings per share of $1.47, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 18.6.
With its five-year average multiple and its estimated 3.5% earnings growth rate in fiscal 2016 in mind, I think Finning International’s stock could consistently command a fair multiple of at least 15, which would place its shares upwards of $22 by the conclusion of fiscal 2016, representing upside of more than 25% from current levels.
Also, the company pays a quarterly dividend of $0.1825 per share, or $0.73 per share annually, which gives its stock a yield of about 4.2%.
Should you buy one of these undervalued stocks today?
WSP Global, Silver Wheaton, and Finning International are three very attractive long-term investment options. Foolish investors should take a closer look and strongly consider beginning to scale in to positions in at least one of them today.
