Back in mid-January, I’d focused on two discounted dividend stocks that were perfect for income investors on the hunt for value. The grocery retailer Empire Company was the first stock I’d targeted. Its shares have climbed 3.7% month over month as of close on February 13. Next was the telecommunications giant BCE. BCE stock had increased 5.3% over the past month at the time of this writing. Investors who’d jumped on the dip last month are not only getting nice capital gains on the rebound but also an income-yielding equity at a discount.
Today, I want to look at two dividend stocks that offer an attractive discount in the middle of February. Better yet, these stocks also boast hefty dividend yields. Let’s jump in.
The energy sector has taken its lumps to start this year. Fears of the Coronavirus spread in China have caused oil and gas prices to plummet. Several top stocks in this sector were hit by this volatility. Inter Pipeline (TSX:IPL) is a Calgary-based company that is one of the largest natural gas and NGL extraction businesses operating in North America.
Shares of Inter Pipeline have dropped 3.6% in 2020 as of close on February 13. Investors can expect to see its Q4 and year-end results for 2019 on February 20. The company will hope to see a boost going forward, as earnings were negatively impacted by three large-scale turnaround activities at its NGL processing facilities.
Inter Pipeline stock last had a price-to-earnings (P/E) ratio of 15 and a price-to-book (P/B) value of 2.2, which were both favourable in comparison to industry peers. Shares had an RSI of 33 at the time of this writing, which puts Inter Pipeline just outside technically oversold territory. The stock offers a monthly dividend of $0.1425 per share, which represents a monster 7.9% yield.
Superior Plus (TSX:SPB) is a Toronto-based company that is engaged in the energy distribution, specialty, and chemicals business. Its stock has dropped 5.3% month over month as of close on February 13. Shares are still up 8.7% from the prior year.
The company is expected to release its fourth-quarter and full-year results for 2019 on February 20. In the third quarter, Superior Plus reported adjusted EBITDA of $48.2 million, which was up 86% from the prior year. This was driven by higher EBITDA from operations from Canadian propane distribution. Adjusted operating cash flow also rose $17 million year over year to $19.2 million.
Shares possessed a consensus forward P/E ratio of 13.9 according to Morningstar analysis, and it had a solid P/B value of two. Superior Plus stock is trading below its fair value right now, but investors will want to see improved earnings growth in order to keep up with interest payments and its dividend. Shares fell into technically oversold territory in the first week of February but have since enjoyed a marginal rebound.
Superior Plus stock last paid out a monthly dividend of $0.06 per share. This represents a strong 6.1% yield.
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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.