Yesterday, I’d discussed the rise of market volatility in early 2021. The social media-fueled stock frenzy has piqued the interest of many retail investors. Some of these newcomers have limited experience with the stock market. Instead of chasing “meme stocks,” today I want to look at three dividend stocks that can provide stability in a turbulent market. Let’s dive in.
This utility is a dividend stock you can trust
Emera (TSX:EMA) is a Nova Scotia-based energy and services company engaged in the generation, transmission, and distribution of electricity to its customer base. Its shares have dropped 6.1% year over year as of late-morning trading on February 2. Emera is still one of my top dividend stocks. It is a worthy target for those worried about market volatility.
The company is expected to release its final batch of 2020 results later this month. In Q3 2020, Emera reported adjusted net income of $166 million, or $0.67 per share, compared to $122 million, or $0.51 per share, in the prior year. Adjusted profit in the year-to-date period was up marginally to $477 million — however, it was down on an adjusted earnings-per-share basis.
Shares of Emera last possessed a favourable price-to-earnings (P/E) ratio of 15 and a price-to-book (P/B) value of 1.6. Emera offers a quarterly dividend of $0.637 per share, which represents a solid 4.8% yield. Investors should look to this dependable dividend stock in a choppy market.
Market volatility: Why you should buy the dip in this defensive stock
Alimentation Couche-Tard (TSX:ATD.B) is a global giant in the convenience store space. Its shares have dropped 10% year over year. Back in January, I’d targeted this dividend stock due to its attractive value at the time. Alimentation has rebounded marginally, but it is still worth a look as we battle market volatility.
The company is set to release its next batch of earnings in March. In the third quarter of 2020, Alimentation reported net earnings of $757 million or $0.68 per share — up from $578 million, or $0.51 per diluted share, in the previous year. Adjusted net earnings increased 32% year over year to $0.66. The COVID-19 pandemic has been challenging for the company, but it has boosted sales from the consolidation of trips. Fuel volumes have suffered due to the work-from-home restrictions.
Alimentation stock last had a favourable P/E ratio of 12. It has since climbed out of technically oversold territory since January. However, I’m still looking to this defensive dividend stock in early February. It offers a modest quarterly distribution of $0.087 per share.
One more dividend stock to add today
Metro (TSX:MRU) is the last dividend stock I want to zero in on as market volatility ramps up. Grocery retailers proved to be some of the most dependable targets during the March 2020 market pullback. Shares of Metro have climbed 5.2% from the prior year at the time of this writing.
The company released its first-quarter fiscal 2021 results on January 26. Total sales rose 6.2% year over year to $4.27 billion. Meanwhile, food same-store sales rose 10%. Adjusted net earnings increased 9.3% from Q1 FY2020 to $197 million.
Metro declared a quarterly dividend of $0.25 per share — up 11% from the prior year. This represents a modest 1.6% yield. Metro stock boasts a solid P/E ratio of 17. I’m still looking to grocery retailers as the pandemic lingers in Canada.
On the topic of stocks to add in February...
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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC. The Motley Fool recommends EMERA INCORPORATED.