There are three main types of strategies that long-term investors will employ to try and grow their investments as quickly and as risk-free as possible.
These include value investing, which is buying shares that are trading below their fair value; income investing, which is buying companies for the primary reason of earning passive income; or growth investing, which is buying a growing company in a growing industry in hopes that it will return large capital gains.
While each of these three strategies can be very successful on their own, sometimes the stars align, and you can find stocks that are triple threats and fit the bill for all three.
Here are three examples of triple-threat stocks trading on the TSX today.
AltaGas (TSX:ALA) is a midstream energy and utility company that has revamped its business considerably over the last couple of years.
AltaGas has severely reduced its debt by selling non-core assets at the same time that it’s improved its operations and grown its earnings before interest, taxes, depreciation, and amortization (EBITDA) considerably.
It’s now focused on its growth projects such as the highly anticipated Ridley Island Propane Export Terminal, which will help bring Canadian energy to new markets in Asia.
These growth projects represent a major opportunity for AltaGas and its investors but is just one of the reasons why it’s a winning investment today.
AltaGas’s discounted share price is trading at an enterprise value to EBITDA of just 7.6 times, along with its dividend, which yields roughly 4.9%, are also strong reasons why you’d want to own the stock today and why it’s a top triple-threat stock on the TSX.
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Peyto Exploration and Development (TSX:PEY) is an energy company that predominantly produces natural gas.
It’s one of the lowest-cost producers in Western Canada and has been conserving its reserves and lowering its production levels while the price of natural gas stays low.
This has led the share price to fall considerably over the last few years but also created a major opportunity for capital appreciation when the price of natural gas rebounds and Peyto rapidly increases its production levels.
It’s an attractive investment for long-term investors willing to wait out a recovery in the economics of the sector.
Waiting it out could prove to be highly rewarding though, as the company is trading at a forward price-to-earnings ratio of just 11 times and an enterprise value-to-EBITDA ratio of just 4.4 times.
You can’t find stocks for much cheaper than what Peyto is trading for today, and with its dividend yielding close to 6.9%, it’s one of the most attractive investments you’ll make all year.
Chorus Aviation (TSX:CHR) is a provider of regional aviation services around the globe. The company has its own regional and charter operations, as well as its Chorus Aviation Capital business, which is the world’s second-largest regional aircraft lessor.
The regional airline business is a growing industry, and Chorus is well positioned to grow along with it, giving it a tonne of growth potential for years.
It’s one of the only aircraft lessors that also has its own regional operations and leverages its expertise to provide better services and attract more customers.
The company has managed to grow the business at an incredible pace, and considering the growing trend around regional airlines, there’s no reason that should change.
Its stock trades at a price-to-earnings ratio of just 12.8 times today and an enterprise value to EBITDA of just 8.8 times.
It also pays a dividend that yields about 5.9% and has a payout ratio of just 77%.
You can often find a stock that fits two of the three categories, such as a value stock that pays an attractive dividend but doesn’t have much growth potential or a growth stock that’s undervalued but doesn’t pay a dividend.
It’s pretty rare to find triple threats though, so when you find a stock that has all three qualities, it’s a good idea to add it to your long-term portfolio.
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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 Daniel Da Costa owns shares of PEYTO EXPLORATION AND DVLPMNT CORP. The Motley Fool recommends ALTAGAS LTD.