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There are many different ways that investors can find value on the stock markets. One way is by looking at book value. Below are three stocks that are currently trading below their book values that could be great bargains to pick up today.
RioCan Real Estate Investment Trust (TSX: REI.UN) is trading a shade under its book value, as during the past year the stock has dropped by 3% in value.
While it hasn’t been a stock that has traded at a big multiple to its book value, it has always provided investors with a lot of value for their money. The REIT has consistently produced strong earnings reports that have shown strong top and bottom lines.
RioCan isn’t the type of stock that investors are going to expect to have exponential sales growth or a sudden increase in share price, but that’s also what makes the stock an appealing long-term buy: a lack of volatility.
Particularly when you’re investing in dividend stocks, you generally don’t want to see big swings in value and would prefer consistency, which is what RioCan offers and why it’s a great option for investors looking for monthly payouts.
AltaGas Ltd (TSX: ALA) has taken a beating this year with its share price plummeting around 50% since the start of the year. At just 0.8 times its book value, the stock is trading at a bit of a discount where investors can grab a great deal on this high-yielding stock.
While there’s definitely some concern that AltaGas might be due for a dividend cut, the company has long focused on providing its investors with a growing dividend, and making a move like that would be a big change in strategy. And although that doesn’t mean it can’t or won’t happen, I wouldn’t expect it to unless the company has at least another bad quarter.
However, some of this volatility is a result of a struggling oil and gas industry. Prior to its most recent quarter, AltaGas was able to consistently stay in the black and there were no alarm bells.
It’s a bit early to press the panic button on AltaGas yet, and investors who aren’t deterred could earn big returns for buying today.
Cenovus Energy Inc (TSX: CVE)(NYSE: CVE) is trading at the biggest discount here, with the stock price at just 0.6 times its book value. In the past three months, it has declined by more than 25% as it has been hit even harder by challenges facing the oil and gas industry.
Unfortunately, for Cenovus investors, this isn’t new territory for the stock, as last year it fell to similar depths. While it was ultimately able to recover, it has found its way back down around all-time lows.
In the short term, it’s hard to see much optimism for the industry, which is going to make holding Cenovus stock a tough investment decision. But for patient investors that are willing to stay the course, this is a stock that could offer a lot of upside.
