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.