Why Maple Leaf Foods Is a Great Buy on the Dip

Maple Leaf Foods Inc (TSX:MFI) is coming off a new 52-week low as the stock has been heavily oversold after a disappointing quarter that was impacted heavily by instability in the pork market.

Although the company expects to see a rebound in Q4, that’s little consolation to investors focused on the short term. In Q3, profits of $13.4 million were nearly cut in half from the $26.6 million that the company made in the prior year.

While it’s a disappointing result, the good news is that it doesn’t appear that it will have a long-term impact on the company’s future. It could be a great opportunity for investors to pick the stock up at a reduced price, trading at around just 1.5 times its book value.

With the brand being a staple across Canadian grocery stores, it’s hard to be too down on what’s generally a very stable stock.

Even with the recent decline, the stock is still up 22% over the past five years, creating a lot of value for investors along the way. And what makes it even more attractive is that it pays a dividend of 2.5%.

Long term, Maple Leaf Foods is one of the more stable stocks that investors can own, and that makes its recent dip an opportune time to buy. With the company getting into the plant-based hype with Lightlife Burgers, there are some strong growth opportunities ahead for the company. While it may be down today, the stock is a good bet to bounce back and it could produce strong returns for investors.