Last week was a rough one for the markets, as the TSX dripped red. Even the markets south of the border suffered, and there is once again a sense of uneasiness in the streets. During these sell-offs, investors tend to flock for the exits.
The savvy investor, however, will be on the lookout for great buying opportunities. In a market of low interest rates, dividend-growth companies have enjoyed a record bull run. It has been difficult to find value. Thanks to the recent downtrend, there are a few companies now trading at great prices.
Here are three top Canadian dividend-growth stocks to buy today. All three are Canadian Dividend Aristocrats with dividend-growth streaks greater than five years.
Canadian Tire (TSX:CTC.A)
First up, we have Canadian Tire. This is the second time in 2018 whereby investors have been presented with a great entry point. If you missed out on the first, don’t miss out on this one.
As of writing, Canadian Tire is trading at a cheap price-to-earnings (P/E) ratio of 14.75 and at only 11.79 times forward 12-month earnings. For the first time since January 2016, it is trading below its historical P/E average. Historically, the company has traded in line with expected growth rates and historical averages. As such, when opportunities such as this come up, they don’t last long.
A few weeks ago, Open Text vaulted to the top of my tech watch list. Since my article, the tech sector — and the company’s share price — has been under pressure. It’s rare to see such attractive growth companies trading at big discounts.
Open Text is now trading well below its historical averages and has P/E-to-growth ratio below 1.5. I couldn’t pass up the opportunity to pick up such a high-growth company on the cheap.
Not only do I anticipate significant share price appreciation, but I will also be rewarded with double-digit dividend growth.
Looking for a sure-fire strategy to pick up Canada’s big banks on the cheap? One of the most effective is to buy the banks once they dip below their historical P/E average.
Thanks to the recent struggles in the financial industry, TD dipped below its historical P/E average for the first time since July of last year.
Over the past 20 years, the longest TD has traded below its average P/E ratio was approximately 1.5 years between 2011 and 2012.
Every other time, it was but a blip on the screen before returning to trade in line with its average. It has the best performance, highest dividend-growth rate, and lowest payout ratio among its Big Five peers. Don’t miss this chance to pick up Canada’s best bank!
When you buy heavily cyclical stocks at low prices… and then hold the shares until the cycle reaches its peak… you can make a very healthy profit.
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Our top advisor Iain Butler has just identified his #1 stock to buy in 2018 (and beyond).
The last time this stock went from the low point of its cycle to the peak… shares shot from $12 to $40 inside of 4 years. That’s an 300%-plus return. And if you missed out on that ride, today might just be your second chance.
The Motley Fool owns shares of Open Text. Fool contributor Mat Litalien is long Open Text, Canadian Tire and Toronto-Dominion Bank. Open Text us a recommendation of Stock Advisor Canada.