The Canadian stocks we’ve identified have attractive price-to-book and price-to-earnings ratios
SmallCapPower | June 16, 2020: Many commentators have suggested that North American equity markets appear overbought, especially the high-flying tech stocks. For those who consider themselves to be value investors, today we have discovered three top Canadian stocks that look appealing, all of which have price-to-book and price-to-earnings ratios less than the average for stocks included in the S&P/TSX index.
*Returns are based on closing stock prices as of June 15, 2020
Aecon Group Inc. (TSX:ARE) – $15.05
Aecon Group is one of Canada’s largest construction and infrastructure development companies, delivering integrated solutions to private and public-sector clients through its Construction segment in the Civil, Urban Transportation, Nuclear, Utility and Industrial sectors, and providing project development, financing, investment and management services through its Concessions segment. Expect more infrastructure spending by governments in Canada in order to stimulate economic growth during COVID-19, which should benefit Aecon. The Company’s earnings per share have increased at a 23% CAGR over the past five years, with a 14% dividend CAGR during the past nine years. ARE stock has a current dividend yield of 4.2%.
- One-Year Return: – 19% (Excluding dividends)
Pembina Pipeline Corporation (TSX:PPL) – $34.48
Pembina Pipeline is a transportation and midstream service provider that owns an integrated system of pipelines that transport various hydrocarbon liquids and natural gas products produced primarily in western Canada. The Company also owns gas gathering and processing facilities; an oil and natural gas liquids infrastructure and logistics business; is growing an export terminals business; and is currently developing a petrochemical facility to convert propane into polypropylene. PPL stock has a current dividend yield of 7.5%.
- One-Year Return: – 24% (Excluding dividends)
Equitable Group Inc. (TSX:EQB) – $72.80
Equitable Group is a Canadian financial services business that operates through its wholly-owned subsidiary Equitable Bank, which has become Canada’s ninth largest independent Schedule I bank through its branchless approach and customer service focus in providing residential lending, commercial lending and savings solutions to Canadians. EQ Bank, the Company’s digital banking platform, announced recently that it has surpassed $3 billion in deposits. Equitable Group had a book value of $82 per share at the end of Q1 2020 (March 31). EQB stock has a current dividend yield of 2.1%.
- One-Year Return: 8% (Excluding dividends)
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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