3 Cheap Stocks to Add to Your Portfolio Today

Are you looking for a value play? If so, take a look at Open Text Corporation (TSX:OTC)(NYSE:OTEX), Cogeco Cable Inc. (TSX:CCA), and Constellation Software Inc. (TSX:CSU).

| More on:
The Motley Fool

As many investors have come to know, finding the right stock at the right price is a difficult task. To make things easier I have compiled a list of three stocks that are trading at inexpensive forward valuations compared with their five-year averages, so let’s take a closer look at each to determine which one would fit best in your portfolio.

1. Open Text Corporation

Open Text Corporation (TSX:OTC)(NASDAQ:OTEX) is one of the world’s largest providers of enterprise information management. At today’s levels, its stock trades at just 15.1 times fiscal 2015’s estimated earnings per share of $3.45 and only 14 times fiscal 2016’s estimated earnings per share of $3.73, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 29.4. In addition, the company pays a quarterly of $0.20 per share, or $0.80 per share annually, giving its stock a 1.5% yield.

2. Cogeco Cable Inc.

Cogeco Cable Inc. (TSX:CCA) is the 11th-largest cable operator in North America and one of the largest in Canada. At current levels, its stock trades at just 12.8 times fiscal 2015’s estimated earnings per share of $5.29 and only 12.6 times fiscal 2016’s estimated earnings per share of $5.39, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 13.2. Additionally, the company pays a quarterly dividend of $0.35 per share, or $1.40 per share annually, which gives its stock a 2.05% yield.

3. Constellation Software Inc.

Constellation Software Inc. (TSX:CSU) is one of the world’s leading providers of software and related services to businesses in both the private and public sectors. At today’s levels, its stock trades at just 31.9 times fiscal 2015’s estimated earnings per share of $16.18 and only 26.6 times fiscal 2016’s estimated earnings per share of $19.39, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 38.1. In addition, the company pays a quarterly dividend of $1.00 per share, or $4.00 per share annually, giving its stock a 0.8% yield.

Which of these three stocks should you buy today?

Open Text, Cogeco Cable, and Constellation Software are three of the top value plays in the market. Foolish investors should take a closer look and strongly consider initiating long-term positions in at least one of them.

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 Joseph Solitro has no position in any stocks mentioned. The Motley Fool owns shares of Open Text.

More on Dividend Stocks

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Best Stock to Buy Right Now: Enbridge vs TC Energy?

Enbridge and TC Energy rebounded nicely over the past year. Are more gains on the way?

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

2 Utility Stocks That Are Smart Buys for Canadians in November

Are you looking for some of the smart buys to consider in November? These utility stocks offer growth and a…

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Is Power Corporation of Canada Stock a Buy for its 5% Dividend Yield?

Is Power Corporation of Canada (TSX:POW) stock's 5% dividend yield worth it? Discover why this resilient stock could be a…

Read more »

hand stacks coins
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These three dividend stocks are ideal for strengthening your portfolio and earning a stable passive income.

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer REIT Stocks to Buy Right Now for Less Than $200

REITs have long been touted as some of the best dividend stocks out there if you want recurring, strong income.…

Read more »