TD:CC - 2 Dividend Stocks You May Regret Not Buying at Today's Deep Discount
2024-07-26 16:40:00 ET
There’s no shortage of great dividend stocks to buy on the market. Prospective investors looking for a great option to buy can also take solace in knowing that some of those dividend stocks trade at a deep discount.
Here’s a look at some of those discounted dividend gems.
Down almost 30% in two years but still a viable investment
Does your portfolio contain BCE ( TSX:BCE )? BCE is one of the largest telecom companies in Canada. It also happens to be trading down a whopping 30% over the past two years.
That epic decline also means that BCE’s reliable quarterly dividend has swelled to an insane 8.70%. This makes the telecom one of the best-paying dividend stocks on the market thanks to that deep discount.
By way of example, investors who drop $30,000 into BCE will generate an income of just over $2,600.
But is BCE a good buy, considering that deep discount? BCE should be considered a long-term holding. Rising interest rates have put pressure on the telecom over the last several years, leading to a series of deep cuts by the company.
Prospective investors should note that telecoms like BCE are incredibly defensive stocks to own. And if anything, in recent years the need for mobile devices and a fast stable home internet connection has made them a necessity.
More importantly, now that interest rates are beginning to drop, investors can expect some recovery, but it will be a long, slow ride. Fortunately, that juicy dividend will keep investors company.
Down 6% this year, but a recovery is brewing
Another of the great dividend stocks that trades at a deep discount is Toronto-Dominion Bank ( TSX:TD ). Canada’s big bank stocks are well-known for being a source of reliable income and growth.
But then, why is TD currently trading down 6% year to date?
That can be attributed to ongoing investigations by U.S. regulators into TD’s actions. Specifically, TD’s actions to report suspicious activity. The bank has set aside a whopping $450 million for potential fines, but pundits see TD being on the hook for what could be billions.
So, where does this put prospective investors looking at TD as one of the dividend stocks trading at a deep discount? Like BCE, investors should look at TD as a long-term play.
TD has endured nearly two centuries. That includes countless dips and surges in the market. So, while current investors wait for that eventual turnaround, the bank’s 5.10% dividend remains an appealing option to consider.
One final point that investors should recall is that TD has a massive segment in the U.S. market. Specifically, It boasts a branch network stretching from Maine to Florida, with more branches than it has in Canada.
In other words, this is both a growth and income-earning play that is on sale right now.
Dividend stocks with a deep discount
No stock is without some risk. And that includes both TD and BCE, which both have significant defensive moats. That’s why the importance of diversifying cannot be understated enough.
Both of the above stocks trade at deep discounts right now, and this makes these dividend stocks appealing options to consider. In my opinion, one or both should be part of any well-diversified portfolio.
Buy them, hold them, and watch them (and your future income) grow!
The post 2 Dividend Stocks You May Regret Not Buying at Today’s Deep Discount appeared first on The Motley Fool Canada .
Fool contributor Demetris Afxentiou has positions in BCE and Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
2024