NPI:CC - 3 Cheap Canadian Stocks That Offer 4% Dividend Yields
2024-03-14 10:00:00 ET
There are plenty of opportunities on the TSX for passive-income investors to get excited about today. From century-long dividend-payout streaks to high yields, there’s no shortage of high-quality dividend stocks to choose from.
With that in mind, I’ve put together a basket of three well-priced dividend-paying companies. The three dividend stocks are yielding above 4% today. In addition, all three companies are very different from one another, providing investors with much-needed diversification in their portfolios.
If you’re looking to build a passive-income stream today, these are three dividend stocks that should be on your watch list.
Dividend stock #1: Toronto-Dominion Bank
Canadian banks are an excellent place for a passive-income investor to be on the lookout for their next purchase. The Big Five not only pay top yields but also own some of the longest dividend-payout streaks you’ll find on the TSX.
Nearing a market cap of $150 billion, Toronto-Dominion Bank ( TSX:TD ) is the second largest of the Canadian banks. It also ranks as one of the largest stocks on the TSX.
What separates TD Bank from its peers is the bank’s strong U.S. presence. It’s certainly not unusual for a Canadian bank to have business in the U.S. However, TD Bank has done an excellent job strengthening its market position in the U.S. and there’s still lots of growth potential there.
At today’s stock price, TD Bank’s dividend is yielding just about 5%.
Shares of TD Bank are also trading at a discount. The bank stock is currently down close to 25% from all-time highs.
Dividend stock #2: Northland Power
The renewable energy sector is another area of the Canadian stock market to be bargain-hunting. Many stocks across the space have been on the decline since early 2021, including Northland Power ( TSX:NPI ).
Shares of the renewable energy stock are down a whopping 50% since early 2021. Excluding dividends, Northland Power is now trading at a loss over the past five years.
In addition to a serious value play, growth potential and passive income are two other reasons to be interested in a beaten-down renewable energy company like Northland Power.
The company is no stranger to outperforming the market. And with the demand for renewable energy only expected to continue rising, there’s reason to believe that Northland Power will return to its market-beating ways sooner rather than later.
In terms of the dividend yield, the pullback in price has sent the yield up to a very respectable 5%.
Dividend stock #3: Brookfield Infrastructure Partners
The last pick on my list is a trustworthy utility stock.
I’ll admit, aside from a 5% dividend yield, there’s not a whole lot to get excited about with a company like Brookfield Infrastructure Partners ( TSX:BIP.UN ).
The beauty of being a boring company is that it can lead to lower levels of volatility. And after the past couple of years that have had no shortage of dramatic price swings, the dependability of a utility stock could go a long way for investors.
If you’re looking to dial back the risk in your investment portfolio, I’d strongly suggest adding a high-yielding utility stock that you can trust, like Brookfield Infrastructure Partners.
The post 3 Cheap Canadian Stocks That Offer 4% Dividend Yields appeared first on The Motley Fool Canada .
Fool contributor Nicholas Dobroruka has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy .
2024