Benjamin Graham, the mentor of Warren Buffett, coined the term “value investing.” He is also referred to as the father of value investing. In this type of investing, the primary goal is to pick value stocks that are trading at levels that undervalue their future earnings potential.
Of course, that’s easier said than done. This market, by all accounts, is pricey. However, there are always pockets of the market that retain excellent value, even in volatile and uncertain times.
In this regard, three value stocks I think are worth considering right now are Manulife (TSX: MFC)(NYSE: MFC), Dream Industrial REIT (TSX: DIR.UN), and Agnico Eagle (TSX: AEM)(NYSE: AEM). Here’s why.
Top value stocks: Manulife
Manulife is a prominent provider of insurance and financial services. This company extends a wide range of services to its clientele. These include everything from commercial mortgages to asset management, commercial and consumer banking, wealth management, securities underwriting, mutual funds, real estate, and reinsurance and insurance.
Manulife has grown to impressive size both in the company’s domestic North American market and abroad. Accordingly, investors bullish on international growth in the insurance space often look to Manulife for this profile.
The company’s forward-looking earnings prospects remain strong. Accordingly, investors looking at Manulife’s 5.1% dividend yield may want to lock in such a juicy yield right now. Indeed, given the company’s valuation of only seven times earnings, there’s a lot to like.
Dream Industrial REIT
Dream Industrial REIT is another company with an attractive dividend yield as well as an attractive valuation. This trust currently pays out a 4.4% yield and is valued at only six times earnings. There’s cheap, and then there’s Dream Industrial REIT.
This trust’s attractiveness mainly comes from the REIT’s structure. Industrial real estate provides the foundation upon which shipping and logistics are able to function. Given the prevalence of e-commerce, this is a big deal.
Dream Industrial owns, operates, and manages a portfolio of 351 buildings (239 industrial assets) as of the end of last year. The trust’s gross leasable area measures approximately 43 million square feet. Accordingly, this is a big player in the industrial real estate game in North America.
Those thinking long term may want to give this income/value stock a look at these levels.
Agnico Eagle
Finally, we have Agnico Eagle. This top-notch gold miner has been among my top value picks for some time. And it’s not only due to the company’s trailing 27 times earnings estimate (forward P/E is much more attractive).
Rather, it’s this company’s high-quality portfolio of gold mines that has me excited. I continue to be bullish on gold as a long-term commodity. In the gold mining space, Agnico Eagle is one of the best operators. With Kirkland Lake’s assets now under this company’s belt, there’s more to like.
Those thinking long term and defensively may want to consider this value stock at these levels. On a forward-looking basis, it’s dirt cheap.
