In this article, we’ll be looking at some great value stocks trading on the TSX based on fundamentals, specifically price to book value (P/BV) and dividend yield. We’re looking for companies that are trading around book value with high dividend-payout ratios and an established history of at least five years of growing dividends. They’re not easy to find, but we’ve dusted off these companies for you to have a look.
Warren Buffett’s mantra of finding “cigarette butts,” or those companies that may have been looked over or discarded by other investors, and getting “a few more puffs” is what we’re specifically looking for here. Many of these companies are in mature industries with weakening profits and increased competition; however, we’re focusing on the long-term stability of these companies and their dedication to providing dividends consistently.
Acadian Timber Corp. (TSX:ADN) is a Canadian supplier of softwood lumber and other primary forest products in eastern Canada and northeastern U.S. The company has a current P/BV of 1.16 with a five-year average dividend yield of 5.89%. The company’s current price-to-earnings ratio is 14 with a forward price-to-earnings ratio of 23. The company currently pays out approximately 77% of profits to shareholders and has been historically a great pick for dividend investors.
Corus Entertainment Inc. (TSX:CJR.B) is a Canadian media company composed of a number of television, radio, and digital media assets. The company is currently trading below book value with a current P/BV ratio of 0.96 and a five-year average dividend ratio of 5.57%. The company currently pays out approximately all of its earnings to shareholders and is another beauty for the income-focused value investor.
Dorel Industries Inc. (TSX:DII.B) is a global producer of children’s consumer products, focusing on furniture, leisure products, and accessories. The company is currently trading at book value (P/BV ratio of 1.02) with a five-year average dividend yield of 2.91%. The company has paid dividends quarterly since 2007, and its current dividend yield sits at 4.5%.
Rocky Mountaineer Dealerships Inc. (TSX:RME) provides agricultural and industrial equipment, parts, and service to western Canada. The stock is currently trading at book value (1.01 P/BV ratio) with a five-year dividend yield of 3.91%. The company has had a stable, growing dividend since 2008, and its current dividend yield sits at 5.3%.
Evertz Technologies Limited (TSX:ET) is a broadcast telecommunications and media equipment provider, focusing on products that support the production, transmission, and broadcasting of video and audio content. The company currently trades at a P/BV of 3.29 with a five-year dividend yield of 3.89%. The current dividend yield for Evertz is 4.4%, and the company has maintained a high payout ratio with a consistent and growing dividend since 2007.
