TOI:CC - 3 Vital Value Stocks Every Investor Should Consider
2024-04-02 16:20:00 ET
Value stocks are some of the best places where investors can get in for enormous long-term growth. Yet when it comes to finding the vital ones — value stocks that are due to continue climbing pretty much indefinitely — that can be difficult.
Investors will need to consider a number of items when identifying these value stocks. The price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, and price-to-book (P/B) ratio should all be low, for instance, compared to the sector average. Furthermore, consider the stability of growth in the industry, a stable dividend , and overall financial health of the company.
Today, we’re going to look at three value stocks investors can get in now — ones that check all the boxes, especially for future growth.
Manulife stock
Insurance companies have long-held value opportunities, especially during economic downturns. These companies provide investors with an undervalued option due to concerns about loan defaults or regulatory issues. Yet above them all, I would consider Manulife Financial ( TSX:MFC ).
Manulife stock is an excellent option, as it continues to expand the globe. The company has a strong mix of financial protection, wealth management, and insurance. It stretches from Asia to the United States, with strong finances and is overall performing well in what could be a highly competitive industry.
Manulife stock trades at 12.7 times earnings, 1.45 times sales, and 1.48 times book value. Shares are up 35% in the last year, and it holds a 4.79% dividend yield. That remains supported by a payout ratio of 56%. And with little debt it needs to cover as well as a 20% profit margin, this is one vital value stock that looks like it will continue to be a cash cow for investors.
Topicus stock
Another strong area for investment is essential tech stocks. These can provide value stocks that investors are too nervous to get into. However, it’s important to consider that there are essential tech stocks out there. And Topicus ( TSXV:TOI ) stock is one of them.
Topicus stock is a diversified technology company providing software solutions and services to various industries. The company purchases essential software companies, providing it with a diversified source of recurring revenue. Topicus stock now offers a wide range of products and services, ranging from financial services to government operations.
Topicus stock remains a value stock even while trading at 94.59 times earnings. That’s because the tech still trades around the average of the last few years — as does its P/S and P/B ratios. With shares up 31% in the last year, analysts believe there is a lot more room to run — especially with a 6.4% payout ratio to consider.
Dollarama stock
Then there are consumer staples . No matter what and no matter how much we cut back, there are items we just need . That’s why companies like Dollarama ( TSX:DOL ) have done so well. Food, beverage, and household products will be less volatile and can offer value opportunities during downturns.
However, Dollarama stock does well no matter what the market does. During this downturn, it has seen an increase in same-store sales. Afterwards, it expands its stores even further as Canadians have more cash on hand to spend.
And yet, even with shares up 26% in the last year, it still is one of the value stocks to consider. It currently trades near its average P/E ratio of 30 as well as five times sales. It currently offers a stable payout ratio as well at 16.63%, and holds a strong balance sheet. This comes from highly liquid assets that continue to grow. Overall, there are many reasons to consider investing in Dollarama stock, as well as these other vital value stocks on the TSX today.
The post 3 Vital Value Stocks Every Investor Should Consider appeared first on The Motley Fool Canada .
Fool contributor Amy Legate-Wolfe has positions in Topicus.com. The Motley Fool has positions in and recommends Topicus.com. The Motley Fool has a disclosure policy .
2024