There was a time when interest rates were actually a great thing, especially for investors. If you had high interest rates, it meant you were receiving those high interest rates through your investments. This is why bonds and GICs were so popular just a few years ago.
But that’s all changed today. Investors are looking for the stable passive income they once received from interest rates, mainly through dividends. But that’s tricky. The volatile market caused many companies to slash dividends, so it’s hard to know where to look.
In this article, I’ll cover three amazing dividend stocks that are still cheap. These will provide strong buy-and-hold options for now and through any volatile market in our future.
The energy sector hasn’t been doing well for a few years now, and it’s not likely to improve overnight. In fact, the cancellation of the Keystone XL pipeline has had a trickle-down effect to other pipeline companies such as Enbridge Inc (TSX:ENB)(NYSE:ENB). The company has been leaping through hoops for years trying to see its growth projects come to fruition, so how come the dividend is still stable?
The answer is that the company has long-term contracts that will last it decades. In that time, its projects will be built. While there is a shift to green energy, oil and gas will remain strong for decades more even if the industry is eventually phased out. In that time you’ll be able to take full advantage of Enbridge and its dividend. The company continues to trade at a 10% discount from where it was before the crash, and offers an amazing 7.57% dividend yield at writing.
Great West Life
The insurance and financial industry have been at the whims of the market, and that includes today. The pandemic has been hard on companies like Great-West Lifeco Inc. (TSX:GWO), and it doesn’t look like things will get better any time soon. It could be years until there is a full recovery, with interest rates remaining low for some time. So profits and returns are likely to be far lower than what they once were.
But again, if you’re in it for the long game Great West is a strong company with a solid dividend. It has the highest return on equity amongst its Canadian peers, with a conservative approach to investing that keeps returns stable. That includes a stable dividend of 5.53% at writing. And with the availability of entering Asian markets, that could mean Great West has a solid future ahead. Yet today it still trades below where it was before the crash.
I don’t think people understand the importance of a company like Nutrien Ltd. (TSX:NTR)(NYSE:NTR). The company has merged a completely fractured industry, taking up the market share in crop nutrients. These nutrients will provide food for us in a world with decreasing arable land. It’s already in India and China where its worth is being proven again and again.
The company is now trading back at pre-crash levels, but it’s still a deal. The more necessary it becomes, the higher its share price will be, especially as it continues to acquire more crop nutrient businesses. Meanwhile, the company continues to offer a strong 3.39% dividend yield at writing.
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 Amy Legate-Wolfe owns shares of ENBRIDGE INC. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends Nutrien Ltd.