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2 Dividend Stocks to Buy on Sale

A few dividend stocks are strong choices to have in any TFSA or RRSP, or any investment portfolio, really. These stocks provide quarterly or sometimes even monthly income that acts like a paycheque for investors, so even if shares are down, your dividends still come in like clockwork.

Making the right choice at the right time can mean an increase in share price while you rake in some side cash. And there are two of these dividend stocks that are on sale right now: Cineplex (TSX:CGX) and Inter Pipeline (TSX:IPL).

Cineplex

With a dividend yield of 6.79% at the time of writing, Cineplex is a strong dividend stock to have in any portfolio. Even when the share price was way back up in the mid-30s, this stock still offers a strong dividend yield that isn’t just “accidentally” high due to a drop in share price.

Lately, that’s pretty much all that investors have been using it for, given its recent share performance. The company plummeted 30% last November and has remained around the $25-per-share mark since that time. However, that looks like it’s about to change.

A strong Hollywood season coupled with business diversification should deliver strong quarterly results, and the company and analysts alike expect this to continue. In fact, the company announced an increase of 3.4% in its dividend just last month.

Analysts expect the stock to rise to $30 or even $40 per share in the next 12 months after the summer season, so this could be a buy-low, sell-high stock. Either way, you’ll be getting a strong dividend during that time.

Inter Pipeline

Another stock offering a juicy dividend is Inter Pipeline. With a dividend yield of 7.84%, this company is also in the position to continue offering a high dividend, even if its share price rises.

Of course, it hasn’t been doing that lately. The company dropped with the markets back in December by 17%, only recovering slightly to where it is at the time of writing at $20.76 per share. Yet again, analysts expect much more from this midstream company.

The company is in the process of growth, increasing its guaranteed long-term contracts to 72% of its business and offering a dividend that far exceeds its peers.

While that growth may slow as the company focuses on its resources and long-term growth opportunities, it can still support the high yield where it is now. And in the next year, analysts predict shares will eventually grow, reaching perhaps $28 per share, creating an opportunity for significant capital gains down the road.

Bottom line

Both of these stocks are in for a bright future, though one may last longer than the other. Yet Cineplex and Inter Pipeline offer investors an extremely attractive dividend yield of about 6.5% in both cases and a significant rise in share price over the next year.

If I’m buying one today for my TFSA, however, it’s likely to be Inter Pipeline. The stock offers a cheap share price that should bounce back after it begins to announce these long-term contracts. Once that happens, a dividend yield of 7.84% will look even more attractive with a share price in the mid-30s.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned.

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