Around this time last month, I’d discussed three top dividend stars that I was bullish on to start the year. Fast forward a month later, and the S&P/TSX Composite Index has been on a roll. It has surged to record highs, even in the face of global economic uncertainty, but this has also made it difficult for bargain hunters.
Today, I want to zero-in on three of my favourite dividend stocks to target right now. These equities have not fallen into oversold territory, but they do boast great track records, nice value, and solid growth potential. Let’s dive in.
Manulife Financial (TSX:MFC)(NYSE:MFC) is one of the top insurance and financial services providers in Canada. Its shares have dropped 5% over the past month as of close on February 17. However, the stock is still up 26% year over year. Manulife has posted promising growth on the back of its expansion into Asia, but economic turmoil in China surrounding the COVID-19 outbreak is a concern going forward.
The company released its fourth-quarter and full-year results for 2019 on February 12. Core earnings rose 5% year over year to $6 billion in Q4 2019. For the full year, its Asia new business value increased to $1.59 billion compared to $1.44 billion in 2018. Its new U.S. business more than doubled from $98 billion to $218 million.
Shares offer good value right now. The stock last had a favourable price-to-earnings (P/E) ratio of 9.4 and a price-to-book (P/B) value of 1.1. In its Q4 earnings report, Manulife rose its quarterly dividend by 12% to $0.28 per share. This represents a solid 4.3% yield.
Imperial Oil (TSX:IMO)(NYSE:IMO) is the second-largest integrated oil company operating in Canada. Oil stocks took a hit as COVID-19 fears impacted spot prices over the past month, but this has also produced buy-the-dip opportunities. This stock is one of my favourites in the energy sector right now.
Shares of Imperial Oil have dropped 9.2% over the past month. This has wiped out all its year-over-year gains. The company posted its Q4 and full-year 2019 results on January 31. Imperial Oil achieved annual production of 398,000 gross oil-equivalent barrels per day — the highest level in over a quarter-century. Net earnings per share rose marginally to $2.88 over $2.86 in 2018.
This stock also looks like a value play today. Shares last had a P/E ratio of 8.8 and a P/B value of 0.9 — both enticing relative to industry peers. Imperial Oil boasts a fantastic balance sheet, and it has achieved over 20 years of dividend growth. The stock last paid out a quarterly dividend of $0.22 per share, representing a 2.7% yield.
Power Corporation (TSX:POW) is a Montreal-based multinational that has a presence across a variety of business sectors. It is wonderfully diversified, which makes it a nice target for investors on the hunt for stability and income. Power stock has climbed 35% year over year as of close on February 17.
The company is expected to release its fourth-quarter and full-year results for 2019 on March 18. In the third quarter, Power reported adjusted net earnings of $0.78 per share compared to $0.61 in the prior year. For the first nine months of 2019 the company reported adjusted net earnings of $2.26 — down from $2.49 in the year-to-date period up to Q3 2018.
This is a reliable dividend payer that is forecast to post solid earnings growth going forward. The stock last had a favourable P/E ratio of 13 and a P/B value of one. Naturally, income investors are here for the dividend. It offers the best yield of this crop I have covered today. Power last paid out a quarterly dividend of $0.405 per share. This represents a 4.7% 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.