3 Cheap Small-Cap Stocks to Buy Today

Russel Metals Inc. (TSX:RUS), Student Transportation Inc. (TSX:STB)(NASDAQ:STB), and AGF Management Limited (TSX:AGF.B) are cheap small-cap stocks. Should you buy one of them?

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The Motley Fool

Finding the right stock at the right price can be a grueling process, and sometimes our searches turn up zero results and leave us frustrated. To make things very easy for you, I have done the hard part and compiled a list of three small-cap stocks that are trading at inexpensive valuations compared with their five-year averages, so let’s take a closer look at each so you can decide which would fit best in your portfolio.

1. Russel Metals Inc.

Russel Metals Inc. (TSX:RUS) is one of North America’s largest metals distribution companies. At today’s levels, its stock trades at 16.3 times fiscal 2015’s estimated earnings per share of $1.40 and 12.9 times fiscal 2016’s estimated earnings per share of $1.77, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 22. In addition, the company pays a quarterly dividend of $0.38 per share, or $1.52 per share annually, giving its stock a 6.65% yield.

2. Student Transportation Inc.

Student Transportation Inc. (TSX:STB)(NASDAQ:STB) is one of the largest providers of school bus transportation services in North America. At current levels, its stock trades at 143.8 times fiscal 2015’s estimated earnings per share of $0.04 and 95.8 times fiscal 2016’s estimated earnings per share of $0.06, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 178.2. Additionally, the company pays a monthly dividend of $0.0464 per share, or $0.556 per share annually, which gives its stock a 9.7% yield.

3. AGF Management Limited

AGF Management Limited (TSX:AGF.B) is a Canadian-based investment management firm, serving institutions and individuals worldwide. At today’s levels, its stock trades at nine times fiscal 2015’s estimated earnings per share of $0.66 and 8.5 times fiscal 2016’s estimated earnings per share of $0.70, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 21.7. Also, the company pays a quarterly dividend of $0.08 per share, or $0.32 per share annually, giving its stock a 5.4% yield.

Should you buy one of these small caps today?

Russel Metals, Student Transportation, and AGF Financial are three of the most attractive small-cap stocks in the market today. Foolish investors should take a closer look and consider buying 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.

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