Dividend stocks can offer your portfolio a great source of income. And buying them when their prices are low will give you a great opportunity to lock in higher-than-normal yields. Below are three stocks that have been down 5% in the past three months that pay as much as 7%.
Suncor Energy (TSX:SU)(NYSE:SU) has seen its share price decline by around 20% in the past year and since mid-March, it has fallen more than 7%. The company increased its payouts recently, and, along with the drop in price, it is now yielding just over 4% per year.
That’s a pretty good payout given the size and stability that Suncor offers its investors over the long term. While there are short-term risks given the company’s exposure to the oil and gas industry, it’s still one of the better buys investors can make. Suncor increased its quarterly dividend payments by 17%, at a time when the industry is still pretty fragile. There could be a lot more upside in both the share price and the dividend if the industry fully recovers.
That’s also a big part of the reason why Suncor is a better buy over the long term than it is the short term, as it’ll take some time before we see a real recovery take place in oil and gas.
Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) hasn’t faced the same problems Suncor has, but it too is down 10% over the past year and 8% in the last three months. Those are very weak numbers for a bank stock that normally doesn’t see that big of a drop in price, especially with the economy still performing very well.
It could be a great opportunity to buy the stock on a dip. CIBC has a strong track record of increasing its payouts as well. Currently, it yields 5.4%, which is nearly unheard of for a top-five bank stock. It’s definitely a rare opportunity to lock in a yield this good with a bank stock, especially with it still near its 52-week low.
CIBC is definitely a much lower-risk stock than Suncor, and it too can offer significant upside for investors.
Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY) is another attractive opportunity, not only because it offers investors a great dividend, but because it’s also trading well below its book value. The stock is down around 6% over the past three months and trades at a modest 10 times earnings.
It has also hiked its payouts recently, and with payments being made in U.S. dollars, there’s an added opportunity for investors to take advantage of a stronger U.S. currency as well. At its current payment of US$0.33 per quarter, Brookfield would provide a yield of around 7% per year.
It’s a terrific payout for the real estate company that offers investors a lot of diversification. And with a beta of around 1.1, it’s a very stable investment as well. While there may not be a lot of opportunity for investors to earn much capital appreciation on this investment, it could be a great option for investors that want to add a solid dividend stock to their portfolios.
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 David Jagielski has no position in any of the stocks mentioned. Brookfield Property Partners is a recommendation of Stock Advisor Canada.