Global stocks capped off a brutal week with another rough trading day on February 28. Indices in the United States and Canada marked the worst one-week performance since 2008. Fears over the COVID-19 outbreak have been the catalyst for this correction, but valuations have been sky high for months. Instead of being treated to an organic pullback, investors have received a rude awakening this week. However, that does not mean it is time to head for the exits.
On the contrary, investors should start hunting for bargains in this environment. Today, I want to look at two top dividend stocks that can be had for cheap, as investors battle major market turbulence.
Genworth MI Canada
In late 2019, I’d discussed the rebound for the housing market and why Genworth MI Canada (TSX:MIC) was one of my favourite stocks in the sector. Housing got off to a hot start in January, as sales and prices both rose double-digits percentage wise over the prior year. Finance Minister Bill Morneau also stepped in to loosen the stress test for insured buyers, which should have a positive impact on activity.
Shares of Genworth have dropped 6.8% over the past week as of early afternoon trading on February 28. The stock is still up 42% year over year. Genworth released its fourth-quarter and full-year results for 2019 on February 5.
For the full year, transactional premiums written rose 9% to $677 million, and total premiums written increased 10% to $701 million. Fully diluted operating earnings per share climbed 2% from the prior year to $5.38. The company credited improved housing activity as a big part of this year-over-year improvement.
Genworth currently offers a quarterly dividend of $0.54 per share, representing a 3.9% yield. At the time of this writing, the stock had a favourable price-to-earnings (P/E) ratio of 10.5 and a price-to-book (P/B) value of 1.2. Shares last had an RSI of 17, which puts Genworth well into technically oversold territory.
The last sharp correction that investors were forced to contend with was back in late 2018. At the time, I’d suggested that investors should pour into Fortis (TSX:FTS)(NYSE:FTS). Fortis is a top Canadian utility holding company based in St. John’s. Its stock has climbed over 15% since the release of that article.
Fortis stock has dropped 2.6% week over week as of early afternoon trading on February 28. It released its Q4 and full-year 2019 results in the middle of February. Annual net earnings climbed to $1.65 billion, or $3.79 per share, compared to $1.10 billion, or $2.59 per share, in the prior year. Its five-year capital plan is expected to increase its rate base from $28 billion in 2019 to $38.4 billion by 2024. This increase is also supposed to support dividend growth through the middle of this decade.
Its stock last paid out a quarterly dividend of $0.4775 per share. This represents a 3.3% yield. Fortis’s P/E ratio of 14 and P/B value of 1.5 sit below the industry average, which puts the stock at decent value right now. Fortis shares also fell to an RSI of 28, indicating that the utility is oversold.
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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 owns shares of FORTIS INC.