Got $3,000 to Invest? Buy These 3 Dividend All-Star Stocks

Canadians with cash to invest in this shaky economy should consider dividend all-star stocks like Capital Power Corporation (TSX:CPX) today.

| More on:
Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks

Image source: Getty Images.

Last month, I’d discussed the Buffett indicator, which takes the combined market capitalizations of publicly traded stocks globally and divides it by global gross domestic product (GDP). This indicator has surged over 100% in recent weeks, indicating that global stocks are overvalued. Because of this, investors with some extra cash to spend may be wary about how to use it. Today, I want to look at three dividend all-star stocks worth stashing in September.

This dividend all-star stock is still undervalued

Manulife Financial (TSX:MFC)(NYSE:MFC) is one of the largest insurers and financial services companies in Canada. Shares of Manulife have dropped 24% in 2020 as of close on September 4. The stock is up 7.9% month over month.

In Q2 2020, net income at Manulife was halved compared to the previous year. Meanwhile, core earnings increased 5% year-over-year to $1.6 billion. As capital markets surged, the company reported Wealth Asset Management (WAM) inflows of $5.1 billion in the quarter. This was up from neutral inflows in Q2 2019. Overall, it was a solid quarter as Manulife battled the negative effects of the COVID-19 pandemic.

This company qualifies as a dividend all-star stock because of its history as a dividend payer and its strong fundamentals. Better yet, its shares last had a very favourable price-to-earnings ratio of 9.8. It last paid out a quarterly dividend of $0.28 per share. This represents a strong 5.8% yield.

One top bank stock with tasty income

Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) is the fifth largest of the Big Six Canadian banks. Its shares have increased 12% over the past month. CIBC released its third-quarter 2020 results on August 27.

This bank had one of the best performances of its peers as it scaled back its provisions for loan losses. Moreover, profit in its Capital Markets division surged 67% over the prior year. Adjusted profit per share came in at $2.71, which blew away analyst expectations. CEO Victor Dodig was optimistic as CIBC looks to execute its recovery strategy into the final quarter of 2020.

CIBC qualifies as a dividend all-star as a member of an already elite group of equities. It boasts an immaculate balance sheet. Moreover, the bank has delivered nine consecutive years of dividend growth. It currently offers a quarterly distribution of $1.46 per share, representing a strong 5.6% yield.

Here’s another dividend all-star stock to buy in September

Capital Power is an Edmonton-based company that develops, acquires, owns, and operates power generation facilities across North America. Its shares have dropped 14% so far this year. In Q2 2020, the company generation adjusted funds from operations of $97 million.

It opted to raise its common share dividend by 6.8% to $2.05 per year, which represented the seventh consecutive annual increase. Capital Power now offers a stellar 7.2% dividend yield. Moreover, the stock last had a favourable price-to-book value of 1.0.

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.

More on Dividend Stocks

Dividend Stocks

If I Could Only Buy 1 Stock Before 2023, This Would be it!

If you could buy 1 stock before 2023, what would it be? Here’s the stock I’m considering, and I think…

Read more »

Beautiful holiday decorated background with christmas gift boxes ,fir. christmas holiday concept
Dividend Stocks

3 Dividend Stocks to Help Offset Holiday Spending

The holidays are here, and so is the seasonal spending. Offset some of those costs by putting your investment cash…

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

The 3 Passive-Income Stocks I’m Buying Next and Never Selling

These passive-income stocks have a proven track record of growth and a solid sector that will guarantee income for decades.

Read more »

oil and gas pipeline
Dividend Stocks

Enbridge Stock Rose More Than 4.5% in November: Is it a Buy Today?

Enbridge is having a good year. Are more gains on the way for the stock?

Read more »

worry concern
Dividend Stocks

3 Budget Mistakes Almost Everyone Makes

Leave these budget mistakes in 2022 and enter 2023 with more cash on hand and a better way of spending.

Read more »

Target. Stand out from the crowd
Dividend Stocks

Got $1,000? Buy These Up-and-Coming Stocks Before They Take Off

These growth stocks beat the long-term market returns and could continue delivering above-average growth in the coming years.

Read more »

Canadian Dollars
Dividend Stocks

Lazy Income: Earn $550 Per Month in 2023

Lazy income investors looking to establish or grow a monthly income stream should consider these options to bring in $555…

Read more »

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance
Dividend Stocks

Got $2,500? 2 Top Stocks That You Can Buy and Hold for a Lifetime

The market is full of opportunities, including these two stocks you can buy and hold forever.

Read more »