These 2 Top Canadian Dividend Stocks Just Went on Sale!

TD Bank (TSX:TD)(NYSE:TD) and Enbridge (TSX:ENB)(NYSE:ENB) stock are two Canadian dividend stocks that just became absurdly cheap!

| More on:

As the stock market continues its ascent to new heights, some pundits have been ringing the alarm bell, calling for a correction in the range of 10-30%. Before you take a raincheck on the top Canadian dividend stocks that exist today, though, it’s important to remember that nobody can time the markets — not even the strategists at top banks can do this, although I’m sure they’d claim otherwise.

We’ve been hearing people calling for a correction for the entirety of this rally, ever since it climbed off those March 2020 lows. While we will be hit with a correction eventually, it’s probably unwise to time it and postpone your purchases, especially if you’ve got more than enough cash on the sidelines to take advantage of dips.

Don’t time the markets: Buy cheap dividend stocks, because they won’t stay cheap forever

Inflation is coming, and so too could be higher rates. Regardless, I think investors should swing at the pitches thrown into their strike zones, regardless of what the correction calls you’re likely to hear anytime the market hits a new all-time high.

The following Canadian dividend stocks, I believe, are on sale now and are ripe for picking for investors looking to invest for the long term, not time the markets over the near term.

Enbridge

Enbridge (TSX:ENB)(NYSE:ENB) is a 7.3%-yielding Canadian dividend stock that’s about as cheap as they come these days. The pipeline kingpin has endured more than its fair share of headwinds over the past year. With the pandemic’s end in sight, things may finally be looking up after years of falling under the weight of industry pressures.

The Canadian midstream energy firm has a well-supported dividend that’s likely to continue growing at an above-average rate over the next five years, as Enbridge’s project pipeline gradually pays dividends over time. The stock trades at 1.7 times book value, 2.4 times sales, which is well below that of the industry average.

Should oil prices surge above US$70 going into a rising-rate environment, Enbridge could be capable of big gains, as income investors flocked to rate-insensitive stocks.

TD Bank

Speaking of a rising-rate environment, TD Bank (TSX:TD)(NYSE:TD) could be on the cusp of a massive bull run. For years, the big banks have been putting up with thinning net interest margins and provisions for credit losses. In the post-COVID world, the tables will likely turn in a big way, and the big banks will finally have tailwinds to their back.

As one of the most prudent managers out there, TD Bank is a must-own dividend stock for the long term, regardless of the environment. Looking ahead, TD has its sights set on a major U.S. acquisition, which could bolster its American retail segment. Given TD’s managers are effective risk managers and deal makers, I suspect the next acquisition will unlock considerable shareholder value.

For now, TD stock boasts an impressive 3.8% yield, which ought to be more than enough incentive to hold the stock through the latter stages of this horrific pandemic. I think that investors have their sights set on the post-pandemic world, which, I think, appears tilted heavily in favour of TD and the big banks.

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 Joey Frenette owns shares of TORONTO-DOMINION BANK. The Motley Fool owns shares of and recommends Enbridge.

More on Dividend Stocks

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How to Use Your TFSA to Double Your TFSA Contribution

If you're looking to double up that TFSA contribution, there is one dividend stock I would certainly look to in…

Read more »

woman looks at iPhone
Dividend Stocks

Retirees: Is TELUS Stock a Risky Buy?

TELUS stock has long been a strong dividend provider, but what should investors consider now after recent earnings?

Read more »

Concept of multiple streams of income
Dividend Stocks

Is goeasy Stock Still Worth Buying for Growth Potential?

goeasy offers a powerful combination of growth and dividend-based return potential, but it might be less promising for growth alone.

Read more »

A person looks at data on a screen
Dividend Stocks

How to Use Your TFSA to Earn $300 in Monthly Tax-Free Passive Income

If you want monthly passive income, look for a dividend stock that's going to have one solid long-term outlook like…

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Passive Income Seekers: Invest $10,000 for $38 in Monthly Income

Want to get more monthly passive income? REITs are providing great value and attractive monthly distributions today.

Read more »

Forklift in a warehouse
Dividend Stocks

Invest $9,000 in This Dividend Stock for $41.88 in Monthly Passive Income

This dividend stock has it all – a strong yield, a stable outlook, and the perfect way to create a…

Read more »

An investor uses a tablet
Dividend Stocks

3 No-Brainer TSX Stocks to Buy With $300

These TSX stocks provide everything investors need: long-term stability and passive income to boot.

Read more »

analyze data
Dividend Stocks

End-of-Year Retirement Planning: 3 Buy-and-Hold Stocks for Canadian Investors

Choosing the right stocks for the retirement portfolio differs from investor to investor. However, there are some top stocks that…

Read more »