Buying dividend stocks on sale is one of the best ways to build long-term wealth. Value and dividend investing are also a defensive way to invest in this part of the cycle. Historically, dividends contribute to roughly a third of total returns. Moreover, buying bargain dividend stocks lead to bigger initial dividend yields.
Here are three dividend stocks that are on sale right now.
The volatility of energy prices provides opportunities for investors to trade energy stocks. Vermilion Energy is a quality stock in the space; it has leading high-netback operations in Europe, North America, and Australia. Notably, it enjoys premium prices for its Brent oil and European gas.
By buying Vermilion Energy stock at a low, shareholders are rewarded with a compelling dividend yield. At the recent quotation of $41.44 per share, Vermilion Energy is good for a juicy dividend yield of 6.66%.
The analysts from Thomson Reuters has a mean 12-month target of $56.80 per share on Vermilion Energy, which represents near-term upside potential of 37%!
XIU Dividend Yield (TTM) data by YCharts – Get market-beating income from Vermilion, Brookfield Property, and Northland.
Brookfield Property is more or less being dragged down by its core retail portfolio, because of the negative sentiment around the retail industry. However, the company’s high-quality portfolio has been delivering stable results. So, in my opinion, the stock’s dip is way overdone.
At about US$20 per unit, Brookfield Property is trading at near a multi-year low, while it has significantly expanded its scale. Currently, Brookfield Property has about US$160 billion of assets under management, spanning across the United States, Canada, Brazil, the United Kingdom, Europe, Australia, and Asia.
Other than its core retail portfolio, Brookfield Property also has iconic office assets in gateway cities around the world, as well as an opportunistic portfolio, which invests in mispriced assets for outsized returns.
The stock will eventually trade at above US$24 per unit for +20% upside. In the meantime, it offers an attractive yield of 6.3%. Additionally, management intends to increase Brookfield Property’s distribution per unit by 5-8% per year. This implies long-term total returns of 11-14%, without accounting for the +20% upside.
Northland Power (TSX:NPI)
Northland Power is growing its global portfolio of power assets at a high pace with a focus on offshore wind facilities in Europe and Taiwan. The stock has been consolidating since 2016. At $21.83 per share, it’s a nice price to start picking at the stock.
The analysts from Reuters has a mean 12-month target of $27.30 per share on Northland Power, which represents near-term upside potential of 25%. In the meantime, the utility offers a 5.5% yield.
By buying these dividend stocks on sale, investors can get an above-average dividend and lucrative upside potential. After buying, all that’s needed is patience.
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Fool contributor Kay Ng owns shares of Brookfield Property Partners and Vermilion.