Last week, we saw a lot of bearish activity, and that has created many great buying opportunities for investors that can see past the negativity.
When stock prices drop, it’s always important to look at the reason behind the decline. The sell-offs that we saw happen last week were largely at the macro level and, in most cases, won’t be reflective of an individual’s stock potential or outlook, and that makes it a good time to buy.
The three stocks that I’ve listed below have seen their prices drop recently and could be bargain buys. Their dividend yields have also increased as a result, and it could be a great time for dividend investors to secure high yields before these stocks bounce back up in price.
Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is one of the best stocks you can invest in on the TSX, and it’s an easy one to recommend regardless of where the stock is. With a strong position in the industry, not a lot of variability, and a big presence south of the border, there’s a lot to like about this bank stock.
TD also pays a solid dividend that you can count on and that has increased over the years as well. Currently, TD’s stock pays investors a dividend yielding 3.6%, which has increased as a result of the 6% decline that the share price has been on during the past month.
While that may not be the highest you can find, even among bank stocks, its payout has risen by nearly 60% in just five years, averaging a compounded annual growth rate of 9.5%.
TransCanada (TSX:TRP)(NYSE:TRP) is another great dividend stock that has been on the decline lately. In the past three months, the stock has fallen more than 10%, and, as a result, it is now yielding 5.4% per year. Like TD, the stock also has a good track record when it comes to increasing its payouts.
With oil prices staying strong at around US$70/barrel and construction set to begin on the Keystone XL next year, there is hope that the industry will continue to get stronger, and that makes TransCanada’s stock an even better long-term buy.
Telus (TSX:T)(NYSE:TU) has lost 8% of its value in the past month, as it has also been unsuccessful in avoiding the bears. Generally, the stock has provided investors with a lot of stability, and despite this recent sell-off, Telus is down less than 2% over the past 12 months. Its stability makes it a great dividend option for investors that want to avoid big swings in their portfolios.
As a result of the recent decline in share price, Telus stock now offers investors a yield of 4.7%, which is pretty high for a top industry stock with minimal risk. While Telus has not been able to achieve any significant sales growth over the years and 2017’s top line up less than 4%, the company has been able to generate a consistently strong bottom line, averaging a profit margin of 10.8% over the past five quarters.
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Fool contributor David Jagielski has no position in any of the stocks mentioned.