There are a few things that most value investors have in common. Among them are stocks that pay attractive dividends, trade at attractive valuations, and, for whatever reason, have found themselves “out of favour” with the markets.
The good news for value investors then is that they have the opportunity to pick up two great “blue-chip” Canadian companies trading near their 52-week lows.
And both companies are paying solid dividend yields as well — both yield over 4% heading into Friday’s trading.
Let’s take a look.
BCE (TSX: BCE)(NYSE: BCE) is coming off a great run that has seen the value of the company rise by 256% since 2009. In case you’re wondering, that works out to an annual return of 13.56% — nearly double what the TSX Composite has returned over the same period.
Not bad at all for what’s supposed to be a “low-volatility” stock, right?
But what’s happened is that BCE stock has sold off to start 2018 — down 8.8% since the start of the year, as investors adjust to difficult “comps” following a strong year in 2017.
Despite that, the company’s second-quarter results, which were released last week, were actually pretty encouraging.
BCE reported top-line growth of 1.7% for the quarter, including post-paid wireless additions up 37.8% — the company’s best quarter since 2000 — and internet subscriptions up by 76.5%. For the full year, management is guiding for revenue growth of between 2% and 4% and adjusted earnings growth of between 1% and 4%.
Sure, that may not blow you away, but it should be enough to continue to support the company’s dividend payout of $3.02, which yields investors 5.65% annually heading into Friday.
This is the type of stock that could make a great addition to your RRSP account.
Meanwhile, Crescent Point (TSX:CPG)(NYSE:CPG) is a little different than BCE in that it’s a much more aggressive value play.
Despite lower oil prices, which have plagued energy markets since 2014, Crescent Point has been determined — some would argue, to a fault — in its pursuit of investing in production for the benefit of growth that should be realized for years to come.
Crescent Point has gone as far as to cut its dividend to shareholders — twice in fact — first in 2015 and then shortly after in the beginning of 2016.
But since the company’s stock has underperformed so much — shares are down over 80% from their high just shy of $40 in 2014 — its dividend yield currently sits at a very respectable 4.27% heading into Friday’s trading.
While skeptics have questioned management’s stubbornness in sticking to such a capital-intensive strategy, it’s one that could end up paying off for patient Fools down the road in a very big way.
