What are value stocks?
One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.
Value stocks are stocks trading lower than their financial fundamentals suggest. They are perceived as undervalued, and have the potential to rise. Many new tech stocks, for instance, start out as growth stocks and transition into value stocks.
They have a low price-to-earnings and price-to-book ratios—which is why they’re less expensive than growth stocks. Due to this fundamental distinction, a value stock is often traded at a more affordable rate than a growth stock.
To investors, they see companies that fall into this category as undervalued. These investors are less likely to invest in a growth stock because they feel that value company’s stock will eventually reach their full potential once they are recognized by the market.
Generally speaking, the climb is steady for value stocks. The only other way for it to emerge into the market like a growth stock is for it to be a bit more innovative with its products or services.
Pat McKeough is an expert at delving into a company’s financial statements and identifying undervalued securities and value stocks. That’s because value stocks are the foundation of any long term investment strategy, at TSI Network we also recommend our three-part Successful Investor strategy:
 How Successful Investors Get RICHLearn everything you need to know in ‘The Canadian Guide on How to Invest in Stocks Successfully’ for FREE from The Successful Investor. How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger. |
FINNING INTERNATIONAL INC. $40 (www.finning.com) is a buy. It sells and services Caterpillar-brand heavy equipment in Western Canada but also South America, the U.K. and Ireland. Its main customers are in the oil and gas, mining, forestry-products and construction industries. While Finning does not operate in the U.S…. Read More
CANADIAN TIRE CORP. (class A non-voting) is a buy. The retailer (Toronto symbols CTC [voting] $223 and CTC.A [non-voting] $147; Conservative Growth Portfolio, Consumer sector; Shares o/s: 55.6 million; Market cap: $8.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 4.8%; TSINetwork Rating: Above Average; www.canadiantire.ca) will spend $2 billion… Read More
MOLSON COORS CANADA INC. is a hold. The brewer (Toronto symbols TPX.A $92 and TPX.B $89; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 215.7 million; Market cap: $19.2 billion; Price-to-sales ratio: 1.1; Dividend yield: 3.0%; TSINetwork Rating: Average; www.molsoncoors.com) makes most of its products in their… Read More
TRANSCONTINENTAL INC. $18 is a buy for aggressive investors. The company (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 83.6 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.5; Dividend yield: 5.0%; TSINetwork Rating: Average; www.tctranscontinental.com) is Canada’s leading printer of newspapers, advertising flyers, in-store displays, magazines… Read More
MOLSON COORS BEVERAGE CO. $62 is a hold. The beer brewer (New York symbol TAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 206.0 million; Market cap: $12.8 billion; Price-to-sales ratio: 1.1; Dividend yield: 3.0%; TSINetwork Rating: Average; www.molsoncoors.com) has acquired the rights to produce, market and sell Fever-Tree… Read More
EMBECTA CORP. $14 is still a buy for long-term gains. The company (Nasdaq symbol EMBC; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 58.1 million; Market cap: $813.4 million; Price-to-sales ratio: 0.7; Dividend yield: 4.3%; TSINetwork Rating: Average; www.embecta.com) makes a variety of medical devices, including stents, catheters, needles… Read More
FEDEX CORP. $256 is a buy. The package delivery firm (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 240.9 million; Market cap: $61.7 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.2%; TSINetwork Rating: Average; www.fedex.com) plans to spin off FedEx Freight as a separate company. This… Read More
TELUS INTERNATIONAL (CDA) INC. $4.94 remains a buy, but only for aggressive investors. The company (Toronto symbol TIXT; Aggressive Growth Portfolio; Manufacturing sector; Shares outstanding: 275.0 million; Market cap: $1.4 billion; Price-to-sales ratio: 0.4; No dividend paid; TSINetwork Rating: Average; www.telusinternational.com) now operates as Telus Digital Experience. It… Read More
These two financial services providers continue to benefit from their recent plans to better focus on their core businesses. We still like both of these high-quality stocks, but prefer IGM for your new buying.
GREAT-WEST LIFECO INC. $52 is a hold. The insurer (Toronto symbol GWO; Conservative Growth… Read More
Transcontinental continues to benefit from its 2018 purchase of a U.S.-based plastic packaging firm. That cut its reliance on its traditional commercial printing operations, particularly as advertisers and publishers shift to online platforms. A new cost-cutting plan should also push its earnings higher in the… Read More
TORONTO-DOMINION BANK $86 is a buy. The lender (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $154.8 billion; Price-to-sales ratio: 2.7; Dividend yield: 4.9%; TSINetwork Rating: Above Average; www.td.com) merged its 43%-owned U.S. online brokerage firm TD Ameritrade Holding Corp… Read More
These top foodmakers continue to adjust their portfolios, including launching new products, as well buying and selling various brands. These moves should spur their long-term earnings growth and cut their risk. Even so, we see only two of the three as buys for you right… Read More
Investors continue to benefit from the 2023 sale of ShawCor’s its legacy pipeline coating operations. The remaining company, now called Mattr, is up about 120% in the past three years. We feel the stock will continue to move higher as its recent purchase of a.. Read More
MOLSON COORS CANADA INC. is a hold. The company (Toronto symbols TPX.A $87 and TPX.B $76; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 215.7 million; Market cap: $16.4 billion; Price-to-sales ratio: 1.0; Dividend yield: 3.0%; TSINetwork Rating: Average; www.molsoncoors.com) is the world’s fifth-largest beer brewer.
The company… Read More
The outlook for Canada’s Big Five banks remains bright, particularly as lower interest rates mean they can reduce funds set aside to cover potential loan defaults. Lower loan-loss provisions will in turn push up their earnings and give them more room to increase their dividends.
ROYAL… Read More
In June 2015, the old Gannett spun off its newspaper operation as a separate company operating under the Gannett name. The remaining broadcasting and Internet unit was then renamed Tegna. Under the deal, for every two shares investors held, they received one share of the… Read More
We recommend investors diversify their Finance sector holdings beyond the big banks with smaller, high-quality firms such as State Street and T. Rowe Price. Both are leaders in their niche industries, and have a long history of rewarding investors with rising dividends.
STATE STREET CORP. $95… Read More
Demand for medical devices continues to improve, particularly as the aging baby boom generation requires more hospital and other care. We like the long-term outlook for Baxter and Becton Dickinson, particularly as they re-organize their businesses for new growth. However, Solventum’s high debt level will… Read More
GENERAL MILLS INC. $64 is a hold. This consumer staples giant (New York symbol GIS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 555.2 million; Market cap: $35.5 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.8%; www.generalmills.com) is one of the world’s largest foodmakers. Its top brands include Cheerios (cereal),… Read More
FORD MOTOR CO. $11 is a hold. The automaker (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 4.0 billion; Market cap: $44.0 billion; Price-to-sales ratio: 0.2; Dividend yield: 5.5%; TSINetwork Rating: Extra Risk; www.ford.com) plans to cut 4,000 jobs at its plants in… Read More
