Market Volatility: 3 Dividend Stocks to Stash in February

Investors worried about market volatility should target stable dividend stocks like Emera Inc. (TSX:EMA) and others.

| More on:
Businessmen teamwork brainstorming meeting.

Image source: Getty Images

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.

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. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC. The Motley Fool recommends EMERA INCORPORATED.

More on Investing

Dividend Stocks

2 of the Best Dividend Stocks to Buy Before They Start to Recover

These dividend stocks offer superior deals for those seeking long-term passive income, but these prices certainly won't last forever.

Read more »

HIGH VOLTAGE ELECRICITY TOWERS
Dividend Stocks

Algonquin Insiders Are Loading Up on AQN Stock – Should You Follow?

Algonquin Power and Utilities (TSX:AQN) insiders poured millions into AQN stock last week. Share valuation multiples seem compelling.

Read more »

Young adult woman walking up the stairs with sun sport background
Stocks for Beginners

New Investor? Buy These 2 Growth Stocks

These two growth stocks are perfect if you want superior growth in the near future but a long-term hold that…

Read more »

Man data analyze
Investing

A Passive-Income Triple Play: 3 Top TSX Stocks to Buy Together

These two top Canadian dividend stocks provide long-term investors with much-needed stability and passive income right now.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

TFSA: 2 Stocks To Earn Passive Income Even in a Recession

Investors are coping with 2023 recession fears differently. Some are investing in stocks that can create long-term passive income.

Read more »

Investing

2 Top Canadian Retail Stocks That Could Get a Holiday Boost

Here's why Canadian Tire (TSX:CTC.A) and Canada Goose (TSX:GOOS) are two top Canadian retail stocks to buy right now.

Read more »

Cogs turning against each other
Dividend Stocks

3 Stocks You Can Confidently Own in an Upside-Down Market

Although many stocks have lost major value this year, here are three high-quality companies you can confidently own in this…

Read more »

Increasing yield
Dividend Stocks

2 Ultra-High-Yield Dividend Stocks on Sale Today

Besides their ultra-high yields, here are more factors that make these two of the best Canadian dividend stocks worth buying…

Read more »