3 Dirt-Cheap Dividend Stocks to Buy Right Now

RioCan Real Estate Investment Trust (TSX:REI.UN) and these two other stocks are safe investments that you can put in your portfolio today.

| More on:

If you’re looking for a great dividend stock to add to your portfolio, then look no further. The three stocks below are not only cheap buys but they can generate dividend income for your portfolio as well:

RioCan

RioCan Real Estate Investment Trust (TSX:REI.UN) is one of Canada’s top real estate investment trusts. With a diverse portfolio of properties, it’s well-diversified and in good shape to handle adversity. While COVID-19 certainly presents some challenges for the company, they shouldn’t be enough to deter investors from what could be an incredible buying opportunity.

The company released its earnings report earlier this month, where it confirmed that it doesn’t have a single tenant that makes up more than 5% of its annual rental revenue. It also said that necessity-based and service-oriented tenants made up 75% of its annual net rental revenue.

And during the quarter, the company’s funds from operations came in at $2.4 million higher than the prior-year period. While net income was down, that was due to fair value gains, which were higher in 2019.

The stock currently pays a monthly dividend of  $0.12 that yields about 10% today.  And it’s trading at just six times its earnings and half its book value, making it a smoking-hot buy right now. Couche-Tard

Alimentation Couche-Tard Inc (TSX:ATD.B) is a convenience store operator with locations all over the globe. The Laval-based company pays a modest dividend which yields just 0.7% per year. But the real value in Couche Tard is the growth opportunity that the stock presents in addition to its dividend income.

The company recorded revenue of US$59.1 billion in fiscal 2019. That’s up 56% from two years ago when its sales were just US$37.9 billion. Couche-Tard’s been a growth machine and has been busy acquiring companies to help expand its business over the years. The company’s even gotten involved in the cannabis industry, investing in pot retailer Fire & Flower.

Shares of Couche-Tard are currently trading at around 16 times earnings, which is what investors would expect to pay for a good value stock, let alone a growth giant like Couche-Tard. While COVID-19 will derail the company’s near-term results, this could be a terrific time to buy the stock for the long haul, especially if the stock dips. Couche-Tard’s stock is up 2% this year.

Canadian Utilities

Canadian Utilities Limited (TSX:CU) is a good, safe dividend stock to own. The utility business generally isn’t that volatile, but so far in 2020 the stock is down 20%, making this another deal that could be too good to resist.

The company released its first-quarter earnings on May 1 and its revenues were down by 25% from the prior-year period. However, that was a result of the company selling its fossil fuel-based electricity generation portfolio and those assets no longer contributing to Canadian Utilities’ top line. The company was still able to post an adjusted per-share profit of $0.66, which was down slightly from $0.73 a year ago.

Canadian Utilities is still doing well and with the dip in price its stock is trading at just 10 times earnings. It’s a bargain buy for the best dividend growth stock on the TSX. The company’s increased its payouts every year since 1972. And today, the stock pays a dividend $0.4354 which yields 5.6% annually. It’s a great payout from a top dividend stock.

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 David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends ALIMENTATION COUCHE-TARD INC.

More on Dividend Stocks

ways to boost income
Dividend Stocks

1 Excellent TSX Dividend Stock, Down 25%, to Buy and Hold for the Long Term

Down 25% from all-time highs, Tourmaline Oil is a TSX dividend stock that offers you a tasty yield of 5%…

Read more »

Start line on the highway
Dividend Stocks

1 Incredibly Cheap Canadian Dividend-Growth Stock to Buy Now and Hold for Decades

CN Rail (TSX:CNR) stock is incredibly cheap, but should investors join insiders by buying the dip?

Read more »

bulb idea thinking
Dividend Stocks

Down 13%, This Magnificent Dividend Stock Is a Screaming Buy

Sometimes, a moderately discounted, safe dividend stock is better than heavily discounted stock, offering an unsustainably high yield.

Read more »

Canadian Dollars bills
Dividend Stocks

Invest $15,000 in This Dividend Stock, Create $5,710.08 in Passive Income

This dividend stock is the perfect option if you're an investor looking for growth, as well as passive income through…

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

3 Compelling Reasons to Delay Taking CPP Benefits Until Age 70

You don't need to take CPP early if you are receiving large dividend payments from Fortis Inc (TSX:FTS) stock.

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

Better Dividend Stock: TC Energy vs. Enbridge

TC Energy and Enbridge have enjoyed big rallies in 2024. Is one stock still cheap?

Read more »

Concept of multiple streams of income
Dividend Stocks

Got $10,000? Buy This Dividend Stock for $4,992.40 in Total Passive Income

Want almost $5,000 in annual passive income? Then you need a company bound for even more growth, with a dividend…

Read more »

Investor reading the newspaper
Dividend Stocks

Emerging Investment Trends to Watch for in 2025

Canadians must watch out for and be guided by emerging investment trends to ensure financial success in 2025.

Read more »