3 Cheap Stocks to Add to Your Buy List

Searching for a value play? If so, Loblaw Companies Limited (TSX:L), Quebecor Inc. (TSX:QBR.B), and Stantec Inc. (TSX:STN)(NYSE:STN) should be on your buy list.

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If you’re in search of an undervalued stock to add to your portfolio, then you’ve come to the right place. I’ve compiled a list of three stocks that are trading at inexpensive valuations compared with both their five-year and industry averages, so let’s take a quick look at each to determine if you should buy one of them today.

1. Loblaw Companies Limited

Loblaw Companies Limited (TSX:L) is the largest owner and operator of grocery stores and pharmacies in Canada with more than 2,400 locations across the country.

At today’s levels, its stock trades at just 18.1 times fiscal 2016’s estimated earnings per share of $3.90 and only 16.1 times fiscal 2017’s estimated earnings per share of $4.38, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 161.4 and its industry average multiple of 25.8. These multiples are also inexpensive given the company’s estimated 13.3% long-term earnings-growth rate.

In addition, Loblaw pays a quarterly dividend of $0.25 per share, or $1.00 per share annually, which gives its stock a yield of about 1.4%. It is also very important to note that the company’s 2% dividend hike in May 2015 has it on pace for fiscal 2016 to mark the fifth consecutive year in which it has raised its annual dividend payment.

2. Quebecor Inc.

Quebecor Inc. (TSX:QBR.B) is a Canadian leader in the telecommunications, media, and entertainment industries, and its subsidiaries include Quebecor, the largest French-language television network in North America, and TVA Network, the most popular television network in Quebec.

At today’s levels, its stock trades at just 15.3 times fiscal 2016’s estimated earnings per share of $2.14 and only 13.1 times fiscal 2017’s estimated earnings per share of $2.50, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 50.4 and its industry average multiple of 22.6. These multiples are also inexpensive given the company’s estimated 19.9% long-term earnings-growth rate.

In addition, Quebecor pays a quarterly dividend of $0.035 per share, or $0.14 per share annually, which gives its stock a yield of about 0.4%. It is also very important to note that the company’s 40% dividend hike in May 2015 has it on pace for fiscal 2016 to mark the second consecutive year in which it has raised its annual dividend payment.

3. Stantec Inc.

Stantec Inc. (TSX:STN)(NYSE:STN) is one of the world’s leading providers of comprehensive professional services in the area of infrastructure and facilities, including planning, engineering, architecture, interior design, surveying, and environmental sciences.

At today’s levels, its stock trades at just 17.7 times fiscal 2016’s estimated earnings per share of $1.91 and only 14.5 times fiscal 2017’s estimated earnings per share of $2.32, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 32.3 and its industry average multiple of 21.7. These multiples are also inexpensive given the company’s estimated 12% long-term earnings-growth rate.

In addition, Stantec pays a quarterly dividend of $0.1125 per share, or $0.45 per share annually, which gives its stock a yield of about 1.3%. It is also very important to note that the company’s 7.1% dividend hike in February has it on pace for fiscal 2016 to mark the fourth consecutive year in which it has raised its annual dividend payment.

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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