Millennials: 3 Hot Dividend Stocks to Buy Today

Millennials should remain strong in this financial crisis and scoop up discounted dividend stocks like IA Financial Corp. (TSX:IAG) in August.

Ambrose O'Callaghan

Ambrose O'Callaghan graduated with a BA in Political Science from McMaster University. After that, he jumped into the banking world. He worked from the front line to an investment associate role. After that, he found a way to marry his experience and knowledge in the world of banking and finance to his love and passion for writing. Ambrose is a passionate believer in Warren Buffett's value investing model.

Published August 4, 2020 2:30 pm EDT

Most millennial workers and investors have already lived through two major economic crises. The previous economic crisis had already informed the behaviour of many millennial investors. Studies have shown that significant portions of this demographic were highly suspicious of the stock market following the 2007-2008 crisis. This caused many millennials to miss out on the massive gains of the past decade.

Today, I want to look at three dividend stocks that can offer some peace of mind in a millennial portfolio. Let’s jump in.

Millennials: Why I love this dividend stock for the future

In late June, I’d discussed how investors could spend $2,000 on the TSX. Maple Leaf Foods (TSX: MFI) was one of the dividend stocks I’d targeted at the time. One of the reasons I love Maple Leaf is because of its bet on the growth of plant-based protein alternatives. The company achieved total company sales growth of 12.8% in Q1 2020. Moreover, its Plant Protein Group reported sales growth of 25.9%.

Shares of Maple Leaf have climbed 15% in 2020 as of close on July 31. The stock last had a favourable price-to-book value of 1.9. In Q1 2020, it approved a quarterly dividend of $0.16 per share. This represents a 2.1% yield. Millennials should be excited about the growth opportunity offered by Maple Leaf as well as the modest income it can deliver as a boon.

One very dependable stock for your portfolio

Garbage collection is one thing that North Americans can continue to count on, even in the face of the COVID-19 pandemic. Waste Connections (TSX: WCN)(NYSE: WCN) provides waste collection, transfer, disposal, and recycling services in the United States and Canada. Its stock has increased 16% in 2020 so far. This is a dividend stock that millennials can count on for the long term.

In the first quarter of 2020, the company achieved revenue growth of 8.7% to $1.35 billion. Adjusted EBITDA came in at $408.5 million, which represented 30.2% of total revenue. The company managed to perform well in the face of the COVID-19 pandemic. It looks well positioned on the earnings side as we move into the next three quarters of this fiscal year.

Waste Connections last paid out a quarterly dividend of $0.185 per share. This represents a very modest 0.7% yield.

Why millennials may want to buy low on this dividend stock

Yesterday, I’d discussed why I’m still bullish on insurance stocks, even as they look to take a hit to earnings due to the pandemic. Millennials can scoop up some of these quality dividend stocks at a discount. IA Financial (TSX: IAG) is a top insurance and financial services provider in Canada and the United States.

Shares of IA Financial have dropped 32% so far this year. In Q1 2020, core earnings per share increased 10% year over year to $1.41. Meanwhile, premiums and deposits rose 19% on the back of strong segregated fund sales. Better yet, IA Financial boasts an excellent balance sheet.

IA Financial stock last had a price-to-earnings ratio of 8.7 and a price-to-book value of 0.8. This puts the stock in attractive value territory. Millennials can also feast on its quarterly dividend of $0.485 per share, representing a 4.1% yield.