3 Dirt-Cheap Dividend Stocks to Buy in April!

Dividend stocks like Enbridge Inc (TSX:ENB)(NYSE:ENB) are getting extremely cheap.

| More on:
Happy family father of mother and child daughter launch a kite on nature at sunset

Image source: Getty Images

Monday saw stocks tumble after two solid weeks of gains. While the losses weren’t as extreme as those seen in March, they showed that the stock market could have more pain ahead. Ultimately, nobody knows what stocks will do in a given day, week, or month. However, over the extreme long term, they tend to rise. In light of that, many top TSX stocks could be considered bargains in April. The following are three particularly cheap ones to consider this month.

Enbridge

Enbridge (TSX:ENB)(NYSE:ENB) is Canada’s largest pipeline company. It ships 1.2 million barrels of crude oil and liquids every day.

Like most energy stocks, Enbridge tanked following the oil price collapse. However, its actual fundamentals should be less impacted than other energy companies — particularly upstream companies. As a pipeline, ENB makes money off of shipping fees, not oil sales. As a result, it doesn’t need strong oil prices to make money.

It does, however, need significant demand for oil, which is coming under threat now. For this reason, I expect Enbridge’s Q1 earnings to be worse than past quarters. However, it will do better than upstream companies, making it a relatively attractive energy play. The stock also yields 8% and trades at just 15 times earnings.

Fortis

Fortis (TSX:FTS)(NYSE:FTS) is one of Canada’s most reliable long-term dividend stocks. Having raised its dividend every single year for the past 46 years, it’s a confirmed Dividend Aristocrat. With a P/E ratio of 14.5 and a 3.5% yield, it’s relatively cheap and has a relatively high yield.

Fortis has a number of qualities that make it a good buy right now.

First, as an essential service, it’s able to keep operating through the COVID-19 lockdowns. Second, as a utility, it is capable of making it through a recession without lost earnings. Third, it has the potential to bounce back from the market crash faster than companies whose operations will be seriously impacted by COVID-19.

Over the decades, Fortis has proven itself to be one of the most dependable dividend stocks on the TSX. That track record has held up through the COVID-19 market crash, with FTS having fallen less than the average TSX stock.

TD Bank

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is one of Canada’s biggest banks. Over the past decade, it has been the fastest-growing Big Six bank, thanks to its U.S. retail business.

This year, TD’s stock is way down. As a result, it trades at just 8.8 times earnings, making it the cheapest stock on this list. It’s also the second-highest-yielding stock on this list, with a 5.5% yield.

TD’s business will absolutely be affected by COVID-19 and weak oil. Thanks to these two developments, its mortgage income and oil & gas loans are under threat. However, the company will bounce back from these headwinds after the crisis abates. It’s also proportionately less exposed to them than other Canadian banks. Because of its U.S. presence, TD has relatively low exposure to oil & gas loans. This makes it one of the better buys among the Big Six.

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 Andrew Button owns shares of TORONTO-DOMINION BANK. The Motley Fool owns shares of and recommends Enbridge.

More on Dividend Stocks

worry concern
Dividend Stocks

Worried About a Recession? 2 Canadian Blue-Chip Stocks to Buy and Hold for Dear Life

A recession is worrisome. Buying two blue-chip TSX stocks and holding them for the long term will deliver stable, less…

Read more »

money cash dividends
Dividend Stocks

TFSA: 3 of the Best Canadian Dividend Stocks to Buy This Year

Are you looking for some of the best Canadian Dividend stocks to buy this year? Here are three great options…

Read more »

Man data analyze
Dividend Stocks

2 Recession-Tough Stocks to Buy in February 2023

TSX stocks, such as Jamieson Wellness, are trading at compelling valuations and might deliver stellar gains to investors.

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

Defensive Investors: 3 Stocks to Shore Up Your Portfolio

Fortis is a defensive stock with an impressive track record.

Read more »

edit Woman calculating figures next to a laptop
Dividend Stocks

Passive Income: 2 Cheap Stocks to Buy and Never Sell

Buying dividend stocks cheap and discounted is a strategy many value investors pursue to maximize the return potential.

Read more »

Female friends enjoying their dessert together at a mall
Dividend Stocks

Dividend Stocks: Will Debt Load Put a Damper on This Top Stock in 2023?

This dividend stock has a very solid track record of revenue and cash flow growth, ,as well as dividend growth,…

Read more »

A plant grows from coins.
Dividend Stocks

How to Invest in One of the Most Important Commodities in the World (It’s Not Gold)

Many things we take for granted may offer economic value and a powerful investment opportunity beyond commodities like gold or…

Read more »

growing plant shoots on stacked coins
Dividend Stocks

Need Passive Income? Turn $15,000 Into $1,016 Annually With These 2 Dividend Stocks

Canadian investors with limited capital can create passive-income streams from two high-yield dividend stocks.

Read more »