As many investors have come to know, finding the right stock at the right price can be a very tough task. To make things easier for you, 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. Computer Modelling Group Ltd.
Computer Modelling Group Ltd. (TSX:CMG) is a computer software technology company that serves the world’s oil and natural gas industries. At current levels, its stock trades at 32.1 times fiscal 2015’s estimated earnings per share of $0.41 and 28.7 times fiscal 2016’s estimated earnings per share of $0.46, the latter of which is inexpensive compared with its five-year average price-to-earnings multiple of 30.7. Additionally, the company pays a quarterly dividend of $0.10 per share, or $0.40 per share annually, which gives its stock a 3% yield.
2. Extendicare Inc.
Extendicare Inc. (TSX:EXE) is one of Canada’s largest owners and operators of senior care centres. At today’s levels, its stock trades at 38.6 times fiscal 2015’s estimated earnings per share of $0.20 and 29.7 times fiscal 2016’s estimated earnings per share of $0.26, the latter of which is inexpensive compared with its five-year average price-to-earnings multiple of 35.6. In addition, the company pays a monthly dividend of $0.04 per share, or $0.48 per share annually, giving its stock a 6.2% yield.
3. Valeant Pharmaceuticals Intl. Inc.
Valeant Pharmaceuticals Intl. Inc. (TSX:VRX)(NYSE:VRX) is one of the world’s largest pharmaceutical companies. At today’s levels, its stock trades at 27.4 times fiscal 2015’s estimated earnings per share of US$10.55 and 21.3 times fiscal 2016’s estimated earnings per share of US$13.57, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 159.6. Investors should note that the company does not currently pay dividends, but its increased amount of cash flow from operations, including 11.3% year-over-year growth to $708.1 million in the first quarter of fiscal 2015, could allow it to initiate one or announce a special dividend in the very near future.
Could your portfolio use one of these stocks?
Computer Modelling Group, Extendicare, and Valeant Pharmaceuticals represent three of the best long-term investment opportunities in the market today. Foolish investors should take a closer look and consider buying one or more of them.
