There are several ways to compare shares and decide which is the cheapest.
The price/earnings ratio is one of the best ways to compare shares because of how universally applicable it is and how easy it is to calculate.
Here are three growing shares that are trading on a cheap price/earnings ratio:
Tassal Group Limited (ASX: TGR)
Tassal is Australia's largest salmon farmer, with several farms based in the perfectly-suited Tasmanian waters.
The fish company expanded its offering in 2015 by buying De Costi, which turned Tassal into a grower of salmon and distributor of many types of fish.
Salmon is one of the healthiest meats. It's no surprise that it's becoming more popular as we are generally eating healthier than a decade or two ago.
Tassal has grown its dividend every year since 2011. It's currently trading at 11x FY18's estimated earnings with a grossed-up dividend yield of 5.64%.
TPG Telecom Ltd (ASX: TPM)
TPG is now one of Australia's largest telecommunication companies thanks to its acquisitions such as iiNet. It has carved out a name for itself as being one of the best (if not the best) at offering value packages.
The NBN is causing problems for all the major telcos' management, but it can still be an opportunity to steal market share for some. TPG may be able to use its size and its focus on price to attract more customers.
TPG is planning to launch mobile networks in Singapore and Australia. I think this is a smart move because it could be profitable and 5G could be the key internet connection in five years' time.
TPG is currently trading at 14x FY18's estimated earnings with a grossed-up dividend yield of 3.88%.
Collins Foods is one of Australia's largest food chain businesses. It used to be famous for its Sizzler outlets in Australia, but now it is mainly a large KFC franchisee.
Collins Foods is actually expanding its network of Sizzler restaurants in Asia. This isn't a large part of the business and profit growth is a bit volatile, but over time it could turn into a good part of the business.
The key to Collins is how well it grows its KFC business. Every year it acquires a few more KFCs in Australia, which adds a few more chicken buckets to the bottom line.
The most exciting part about Collins is the expansion into Europe. This is a huge market and gives Collins the long-term potential to easily triple its number of KFC outlets when you consider Australia's population compared to Germany & the Netherlands.
Collins Foods is trading at 21x FY17's earnings with a grossed-up dividend yield of 3.99%.
Foolish Takeaway
Cheap stocks are often cheap for a reason. However, as long as earnings keep growing in the long-term then all three could be shrewd buys at the current prices.
I think the NBN makes TPG a little too risky for me at the current price, even after the large decline. I think Collins Foods is the most likely to deliver market-beating returns over the next three years due to its European expansion plans.
