If you’re a fundamental investor with cash on hand that you’re ready to put to work in the market, then you’ve come to the right place. I’ve scoured the market and found two stocks that are trading at attractive valuations, have high yields, and have track records of dividend growth, so let’s take a closer look at each to determine if you should invest in one of them today.
Keyera Corp.
Keyera Corp. (TSX:KEY) is one of Canada’s largest midstream energy companies. It provides “essential services,” such as natural gas gathering and processing, natural gas liquids (NGL) fractionation, transportation, storage, marketing, and iso-octane production and sales to oil and gas producers in the Sedimentary Basin.
At today’s levels, Keyera’s stock trades at 23 times fiscal 2017’s estimated earnings per share (EPS) of $1.75 and 20.2 times fiscal 2018’s estimated EPS of $1.99, both of which are inexpensive compared with its five-year average price-to-earnings (P/E) multiple of 34.7 and its trailing 12-months (TTM) P/E multiple of 30.6.
In addition to trading at attractive valuations, Keyera has a fantastic dividend. It currently pays a monthly dividend of $0.14 per share, equal to $1.68 per share annually, which gives it a juicy 4.2% yield today. Investors must also note that it has raised its annual dividend payment for six consecutive years, and its 5.7% hike in May has it on pace for 2017 to mark the seventh consecutive year with an increase. It is also on pace for 2018 to mark the eighth consecutive year with an increase.
Exco Technologies Limited
Exco Technologies Limited (TSX:XTC) is one of the leading designers, developers, and manufacturers of dies, moulds, equipment, components, and assemblies for the die-cast, extrusion, and automotive industries around the world.
At today’s levels, Exco’s stock trades at 8.8 times fiscal 2017’s estimated EPS $1.20 and 7.6 times fiscal 2018’s estimated EPS of $1.39, both of which are very inexpensive compared with its five-year average P/E multiple of 13 and its TTM P/E multiple of 9.3.
On top of being a value play, Exco has a great dividend. It currently pays a quarterly dividend of $0.08 per share, equal to $0.32 per share annually, giving its stock a solid 3% yield today. It’s also important to note that the company has raised its annual dividend payment for seven consecutive years, and its 14.3% hike in February has it positioned for 2017 to mark the eighth consecutive year with an increase.
Which of these stocks belongs in your portfolio?
Keyera and Exco Technologies are trading at attractive valuations, have high yields, and have track records of growing their dividends, making them strong buys in my book. Foolish investors should take a closer look at each and strongly consider initiating positions in one of them today.
