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2 TFSA-Worthy Dividend Stocks I’d Buy Before May Ends

It’s “sell in May and go away” season again and while you may be tempted to throw in the towel on stocks for the summer because of the two corrections the S&P 500 Index experienced over the first quarter, I think doing the opposite is your best course of action. I believe it’s a fantastic time to go bargain hunting in the Canadian markets, whether or not you’re domiciled in Canada.

Many investors have unfairly eschewed Canadian stocks for quite some time. The index has essentially gone nowhere over the past decade, and various foreign investors have lost their confidence in Alberta’s oil patch. Many of these investors probably didn’t see oil prices surging back to US$72, however, and as commodities continue to pick up steam, it’s possible we may see the TSX best the S&P 500 for the first time in a while.

Many Canadian stocks are screaming “buy” today, and I think they could pick up traction along with the broader TSX. Without further ado, here are two Canadian stocks that probably won’t remain depressed for very long. So, investors may want to add these reliable dividend stocks to their TFSAs if there’s leftover cash that hasn’t been put to work yet.

Fortis Inc. (TSX:FTS)(NYSE:FTS)

Shares of Fortis took a ~13% hit to the chin as investors grew wary over rising interest rates. When it comes to Fortis, I think the fears are overblown, especially when you consider the fact that you’re getting a rock-solid dividend (currently yields 4.1%) that’s slated to grow by 6% through 2022.

Fortis is an absolute essential holding for any investor seeking a core position to add to an all-weather portfolio. The utility juggernaut isn’t your typical no-growth business utility; the company actually has the growth capacity to finance dividend growth through good times and bad.

Sure, higher interest rates will work against Fortis, but should the much-feared market crash finally happen, you can sleep well at night knowing your income stream won’t be affected whatsoever.

Moreover, once the markets crash, your exposure to Fortis will dampen the pain your portfolio will feel. As the stock continues to get punished on fears of higher rates, I’d treat it as an opportunity to increase your position to both lower your cost basis and increase the average yield of your principal.

Simply put, Fortis is a reliable dividend stock that you don’t need to worry about. Period.

Manulife Financial Corp. (TSX:MFC)(NYSE:MFC)

Manulife is another stock that’s been punished of late, falling ~16% from peak-to-trough to kick off the new year. Unlike Fortis, higher rates would actually be a tailwind for Manulife, but the stock has continued to struggle to move higher.

Asian growth has been the main story, and through the leveraging of technology, Manulife’s earnings growth profits are expected to accelerate from here. This in turn could cause the stock to pop even though John Hancock has been a major drag on ROEs and growth.

“Currently, the company is experimenting with a digital-only pilot in Thailand. If successful, it will expand to other countries where it feels it can’t compete on the ground with the biggest insurance companies,” said fellow Fool contributor Will Ashworth on May 14, 2018.

Shares currently trade at a 1.3 P/B, a 0.9 P/S, and a 2.7 P/CF, all of which are relatively in line with the company’s five-year historical average multiples of 1.3, 1.1, and 3.3, respectively. Moreover, the 3.53% dividend yield is considerably higher than historical averages.

If you’re looking for a safe stream of income at a decent price, Manulife is a terrific buy on the recent dip.

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Fool contributor Joey Frenette owns shares of FORTIS INC and MANULIFE FIN.

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