Retreat to Safety and Buy These 4 Dividend Stocks

Investors on the defensive in a choppy October should look to Canadian Utilities Ltd. (TSX:CU) and other dividend stocks.

| More on:

Volatility returned to global markets last week and hit the TSX index hard. This represented the second sell-off in 2018 after global stocks were hit in late January and early February. It may come as no consolation for investors after a tepid year so far on the TSX, but the return to risk will bring opportunity.

However, other investors may have security on their minds. Safe havens like gold and silver are one contrarian bet, but today we are going to focus on investors who would rather go on the defensive and stock up on income-yielding equities. Those with a shorter outlook may also be driven to dividend stocks or even more conservative vehicles as the recovery cycle appears to be reaching maturity.

Let’s look at four stocks investors seeking stability can scoop up today.

Canadian Utilities (TSX:CU)

Canadian Utilities stock has dropped 21.8% in 2018 as of close on October 15. The utilities sector has struggled throughout the year as rate tightening has put pressure on income vehicles that have thrived since the financial crisis. However, rates remain historically low, and the Bank of Canada has hinted at letting its foot off the gas as high indebtedness remains a major concern.

Canadian Utilities is expected to release its third-quarter results on October 25. Currently, the stock offers a quarterly dividend of $0.3933 per share, representing a 5.2% dividend yield. The company has achieved 46 consecutive years of dividend growth.

Canadian Western Bank (TSX:CWB)

Canadian Western Bank has managed to climb 2.9% over the past week as of close on October 15. Shares are still down 14% in 2018 so far. In the third quarter Canadian Western saw revenue rise 12% year over year to $205 million and adjusted earnings per share climbed 9% to $0.75. The bank declared a dividend increase of 8% to $0.26 per share. This represents a 2.9% dividend yield. Canadian Western has achieved dividend growth for 26 consecutive years.

Empire Company (TSX:EMP.A)

Empire Company stock has plunged 13.4% over the past three months. Shares are still up 1.7% year over year. The company released its second-quarter results on September 13.

Empire reported adjusted earnings per share of $0.37 compared to $0.32 in the prior year. The company also posted same-store food sales growth of 1.8%. Empire announced the acquisition of Farm Boy in late September and plans to “turbocharge” growth going forward. The board of directors announced a quarterly dividend of $0.11 in the second quarter, which represents a modest 1.8% dividend yield. Empire Company has reported dividend growth for 23 consecutive years.

Enbridge (TSX:ENB)(NYSE:ENB)

Enbridge stock has dropped 3.8% over the past week. Shares are down 14.6% in 2018 but have mostly stabilized since the first major sell-off in 2018. Enbridge scored a big victory by winning regulatory approval in Minnesota for its Line 3 replacement project. Its third-quarter report is expected in early November. Enbridge offers a tasty dividend of $0.671 per share, representing a 6.2% dividend yield. The company has delivered dividend growth for 22 straight years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. Enbridge is a recommendation of Stock Advisor Canada.

More on Investing

A cannabis plant grows.
Cannabis Stocks

Canopy Growth Stock Is Rising But I’m Worried About This One Thing

Canopy Growth stock is soaring as the legalization effort makes real progress in both Germany and the United States.

Read more »

young woman celebrating a victory while working with mobile phone in the office
Investing

3 Roaring Stocks to Hold for the Next 20 Years

These top TSX stocks are excellent long-term buys, given their multi-year growth potential and solid underlying businesses.

Read more »

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

grow dividends
Investing

Here’s My Top 3 TSX Stocks to Buy Right Now

Even though the TSX has been rising, there are still some good bargains out there. Here are three top compounding…

Read more »

Target. Stand out from the crowd
Investing

Prediction: This Canadian Growth Stock Could Double by 2030

Alimentation Couche-Tard (TSX:ATD) is a top growth stock that could do well over the next six or so years.

Read more »

Businessman holding AI cloud
Tech Stocks

Could Investing $20,000 in Nvidia Make You a Millionaire?

Nvidia stock has made investors millionaires in the last 10 years. Is it too late to invest to become a…

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

money cash dividends
Stocks for Beginners

Have $500? 3 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

If you're looking for cheap stocks, these three have a huge future ahead of them, all while costing far less…

Read more »