Value investors, as well as those interested in future share price movement, may be interested to see that the following stocks are today trading at their lowest prices seen over the last year. Keeping your eye out for a bargain? Have a look at these three quality stocks and see what takes your fancy. From a metal-weighted stock that’s survived the years’ tariffs, to a space stock and a juicy dividend-paying REIT, let’s scour the bargains.
A precision metal component maker active internationally, Linamar is a real doozy of a value stock today, trading realistically in terms of assets and growth. It’s discounted by 28% compared to its future cash flow value and has some fine looking multiples: a P/E of 5.7 times earnings, PEG of 0.7 times growth, and in terms of its P/B ratio Linamar is trading at book value.
Linamar has done well to weather a tough year so far for the metal industry that was marked by steel and aluminum tariffs. In addition, 8.4% expected annual growth in earnings is testament to how stable this stock appears at present, while a dividend yield of 0.92% will put a few pennies in your pocket.
Maxar is an aerospace and geospatial intelligence imaging and data company, involved with satellites, planetary imaging, and earth analytics that it provides for both commercial and government clients around the world. It’s the kind of stock that would go well in a war portfolio alongside aviation and carefully selected oil-weighted energy stocks if you’re interested in such things.
Discounted by more than 50% compared to its future cash flow value, Maxar’s P/E of 19.5 times earnings could be a shade lower, though its PEG of 0.6 times growth and P/B of 0.9 times book look good. Throw in a 32% expected annual growth in earnings and dividend yield of 3.35% and you have a quality stock.
It’s been an interesting year for Maxar, with a projected fall in revenue early on, followed by an exciting summer satellite partnership with SpaceX. Maxar is without a doubt the most exciting space stock on the TSX, and one that deserves to be in any Canadian portfolio, with no better time to buy than the present.
Morguard REIT (TSX:MRT.UN)
Discounted by 44% compared to its future cash flow value, Morguard is an REIT to watch, with a P/E of 19.8 times earnings coming in around where it’s expected, and a P/B of 0.5 times book underlining value. A low 3.2% expected annual growth in earnings is indicative of the market at the moment.
A dividend yield of 7.74% is just what the doctor ordered, though before you get a house call, you may want to consider the current softening of the real estate market. Some analysts have been calling for another bursting real estate bubble, while urban centres worldwide are seeing some definite slowdown. Still, business appears to be booming, and as Mark Twain said, “Buy land, they’re not making it anymore.”
The bottom line
If you like your REITs diversified and with plump dividends to boot, Morguard REIT is a great choice. Its dividend is satisfyingly fat, and just right to slot straight into your TFSA or RRSP. Of the other two stocks here, Maxar looks like a buy today, while Linamar has done well to get through the year; in short they’re likewise looking like worthy additions to add to your value-focused portfolio today.
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 Victoria Hetherington has no position in any of the stocks mentioned.