2 Dirt-Cheap Dividend Stocks Yielding up to 14%! Should You Buy Today?

Finning International Inc. (TSX:FTT) and Chemtrade Logistics Income Fund (TSX:CHE.UN) have both sent off buy signals over the past week.

| More on:
Increasing yield

Image source: Getty Images

Last week, I’d discussed two high-yield dividend stocks that were in enticing value territory for investors. Discounts are hard to come by on the TSX right now, with the index hovering around a record high. Today, I want to look at two more dividend stocks that may be worth buying on the dip. One offers a double-digit dividend yield percentage wise. Let’s dive in.

Finning International

Finning International (TSX:FTT) is a Vancouver-based company that is the world’s largest Caterpillar dealer. It sells, rents, and provides parts and services for equipment and engines to customers across a broad array of industries. Its stock has plunged 9.9% week over week as of close on February 14.

The company released its fourth-quarter and full-year results for 2019 on February 12. Fourth-quarter EBITDA rose 21% year over year to $170 million, and revenue increased 4% to $1.91 billion. However, net income and earnings per share fell 10% and 8%, respectively. Earnings were negatively impacted by social unrest in Chile, higher finance costs, and higher long-term incentive plan costs.

For the full year, net revenue climbed 4% to $7.29 billion, and adjusted EBITDA increased 19% to $750 million. Finning expects solid tailwinds in 2020 including improved execution in South America, a lower cost base in Canada, and reduced finance costs. The stock last paid out a quarterly dividend of $0.205 per share, which represents a 3.8% yield. It has achieved dividend growth for over 15 consecutive years.

This post-earnings dip is a perfect time to add Finning International stock. Shares last possessed a favourable price-to-earnings ratio of 14 and a price-to-book value of 1.6. Better yet, the stock last had an RSI of 24. This puts Finning well into technically oversold territory. Investors should jump on this buy signal today.

Chemtrade Logistics

In late October, I’d discussed how investors can scoop up huge tax-free income on an annual basis by targeting high-yield dividend stocks. Chemtrade Logistics (TSX:CHE.UN) was one of the stocks I’d focused on. The company provides industrial chemicals and services in Canada, the United States, and South America.

Shares of Chemtrade have dropped 23% over the past month as of close on February 14. The company will release its fourth-quarter and full-year results for 2019 this week on February 20. In the third quarter, Chemtrade saw revenue drop $22.5 million year over year to $395.7 million. The drop was primarily due to lower prices for caustic soda and hydrochloric acid that offset higher sales of water products.

On the plus side, adjusted cash flow from operating activities came in at $56.8 million compared to $36.2 million in the prior year. For the first nine months of 2019, adjusted cash flows have climbed to $126.5 million over $70.6 million in 2018. In the year-to-date period up to Q3 2019, revenue was mostly flat.

Chemtrade last paid out a monthly dividend of $0.10 per share. This represents a monster 14% yield. The stock has been highly volatile, and Chemtrade needs to make up ground with its earnings or it may risk a dividend cut. However, the stock last had an RSI of 16, which puts it deep in oversold territory. The buy signal is tempting, as Chemtrade offers up such a high yield, but investors should take care, as this dividend may not be safe.

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.

More on Dividend Stocks

Various Canadian dollars in gray pants pocket
Dividend Stocks

Need Passive Income? Turn $5,000 Into $23.85 Every Month

If you're looking for passive income that comes in like a paycheque, this dividend stock provides that to you along…

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

A TFSA Contribution Room of $88,000 and 1 Dividend Aristocrat Can Make You $172,330 Richer

A high-yield Dividend Aristocrat in the energy sector is a suitable holding for Canadians with $88,000 available contribution rooms in…

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

2 Dividend Stocks to Buy Now Under $50

Here are two of the best under-$50 dividend stocks you can buy in Canada right now.

Read more »

Dividend Stocks

If I Could Only Buy 1 Stock Before 2023, This Would be it!

If you could buy 1 stock before 2023, what would it be? Here’s the stock I’m considering, and I think…

Read more »

Beautiful holiday decorated background with christmas gift boxes ,fir. christmas holiday concept
Dividend Stocks

3 Dividend Stocks to Help Offset Holiday Spending

The holidays are here, and so is the seasonal spending. Offset some of those costs by putting your investment cash…

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

The 3 Passive-Income Stocks I’m Buying Next and Never Selling

These passive-income stocks have a proven track record of growth and a solid sector that will guarantee income for decades.

Read more »

oil and gas pipeline
Dividend Stocks

Enbridge Stock Rose More Than 4.5% in November: Is it a Buy Today?

Enbridge is having a good year. Are more gains on the way for the stock?

Read more »

worry concern
Dividend Stocks

3 Budget Mistakes Almost Everyone Makes

Leave these budget mistakes in 2022 and enter 2023 with more cash on hand and a better way of spending.

Read more »