Canadians: 3 Cheap Dividend Stocks to Target in May

The TSX has encountered turbulence recently. Investors may want to consider dividend stocks like Manulife Financial Corp. (TSX:MFC)(NYSE:MFC).

| More on:
Target. Stand out from the crowd

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The S&P/TSX Composite Index was up 100 points in early afternoon trading on May 6. Stocks have looked broadly overvalued since the start of the spring. Investors who are worried about future volatility may want to consider snatching up top dividend stocks. Today, I want to look at three of my favourites. Let’s jump in.

I’ve still got my eye on this top healthcare REIT

Late last year, I’d discussed how investors could generate passive income in their portfolio. Real estate investment trusts (REITs) are a very solid target for those on the hunt for dividends. Northwest Healthcare REIT (TSX:NWH.UN) provides investors access to a portfolio of high-quality healthcare real estate. Its shares have climbed 5.9% in 2021 at the time of this writing. The dividend stock is up 38% year over year.

The REIT is expected to unveil its first-quarter 2021 results on May 13. In 2020, Northwest Healthcare saw IFRS revenue increased 2.1% to $374 million. Meanwhile, adjusted funds from operations (AFFO) rose 1% to $0.85 for the full year. It achieved a strong portfolio occupancy of 97.1%, as the pandemic kept healthcare facilities packed over the past year.

Northwest REIT possesses an attractive price-to-earnings (P/E) ratio of 8.3. It offers a monthly dividend of $0.067 per share. That represents a tasty 6.1% yield.

This dividend stock offers nice value in early May

Manulife Financial (TSX:MFC)(NYSE:MFC) is one of the largest financial services and insurance providers in Canada. It boasts a global footprint which has fueled growth in recent years. I’d suggested that investors should scoop up this dividend stock in the fall of 2020. Shares of Manulife have climbed 16% in 2021. The stock has surged 56% from the prior year.

The company released its first-quarter 2021 results on May 5. Core earnings increased 67% year over year to $1.6 billion. Meanwhile, APE sales rose 14% to $1.8 billion. Asia new business value grew to $477 million compared to $356 million in the previous year. This powered a solid increase in total new business value. The growth of the middle class in Asia has attracted top insurers like Manulife to international markets over the past decade.

Shares of Manulife last had a very favourable P/E ratio of 8.9. It last paid out a quarterly dividend of $0.28 per share, which represents a 4.1% yield.

One more dividend stock that will generate monthly income in your portfolio

Pembina Pipeline (TSX:PPL)(NYSE:PBA) is the third dividend stock I’d like to target in early May. The company is set to release its first-quarter 2021 results after markets close today. Shares of this dividend stock have climbed 27% in the year-to-date period. The stock is up 24% from the prior year.

Oil and gas prices have enjoyed a rebound on the back of a global economic rebound. This has given energy stocks new life in late 2020 and early 2021. Pembina still offers attractive value relative to its industry peers. The dividend stock last paid out a monthly distribution of $0.21 per share. This represents a strong 6.4% yield.

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 recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS and PEMBINA PIPELINE CORPORATION.

More on Investing

Cogs turning against each other
Investing

Top 2 Stocks That Could Beat the Recession

Recession-resistant stocks like Dollarama (TSX:DOL) should be on your radar in 2022.

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

The 3 Best Dividend Stocks for Monthly Passive Income

These three dividend stocks are the best options for those seeking high passive income in the next few years in…

Read more »

clock time
Dividend Stocks

Got $10,000 to Invest? 1 Cheap TSX Stock to Buy Right Now

This top TSX dividend stock is finally on sale and has made some savvy buy-and-hold investors quite rich.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

Want Monthly Passive Income? These TSX Dividend Stocks Are for You

If you want monthly passive income from TSX stocks, you have to do a little digging. I've given you a…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Bank Stocks

The Most Valuable TSX Stock Out There Is up 10% This Month!

This TSX stock is the best value stock out there, expanding even during a downturn and setting itself up from…

Read more »

ETF chart stocks
Dividend Stocks

3 International ETFs to Buy for a Diversified Portfolio

Some international markets may prove more resilient against economic downturns, and exposure to them may strengthen your portfolio during crashes…

Read more »

Payday ringed on a calendar
Dividend Stocks

TFSA Pension: 3 Canadian Dividend Stocks to Buy for Monthly Passive Income

These high-yield Canadian stocks look good to buy right now for a TFSA focused on monthly passive income.

Read more »

A worker uses a laptop inside a restaurant.
Tech Stocks

2 U.S. Stocks Canadian Investors Can Buy and Hold Forever

Blue-chip companies such as Microsoft and Coca-Cola are forever stocks that have the potential to beat the market in 2022…

Read more »