1 Stellar Canadian Stock to Buy on Sale This Week

Quebecor (TSX:QBR.B) is a great Canadian company with a huge dividend and a solid valuation amid its renewed growth prospects.

| More on:
value for money

Image source: Getty Images

Don’t wait around for a September pick-up in trading volumes and volatility. While September tends to be the time that many investors return from their vacation to take action on stocks, a market correction or pullback is no guarantee. In fact, investors may be returning to a considerable amount of buying activity on the back of solid quarterly earnings results. Undoubtedly, it’s foolish (that’s a lower-case f) to make investment decisions based on something as arbitrary as the month.

So, market meltup or meltdown, investors should be ready to bag the bargains they see, because there’s no guarantee that they’ll stick around, even as the TSX Index goes longer without so much as a 5% pullback. That’s why I think it’s a great idea to do a bit of buying today in case that much-anticipated correction never strikes this autumn. The shocking nature of corrections makes them impossible to project. As such, take any short-term correction “calls” with a very fine grain of salt.

In this piece, we’ll have a closer look at three Canadian stocks that still look to be on sale as we head into the latter half of August 2021 and ever so closer to fall and a pick-up in trading volumes.

Consider Quebecor (TSX:QBR.B), one high-yield stock that recently went on sale in a relatively flat market. The name sports a well-covered (and growing) dividend yield of 3.6% at writing.

Quebecor: The Canadian telecom you need to know about

Quebecor is in the midst of a strategic pivot that has many investors hitting the pause button. The telecom firm, which had primarily served the province of Quebec (and some other French Canadian communities), had formed a pretty wide moat around its market of expertise.

Now, it’s looking to expand into new markets, one that could pay huge dividends if all goes well and the firm can capture a nice slice of the pie. It’s not going to be a cheap endeavour, though, or one without its fair share of risk. Quebecor and its Vidéotron brand aren’t well known outside of Quebec. As a result, a considerable amount of marketing spend can be expected.

Still, given how steep wireless services are, Quebecor could separate itself from the pack with more reasonably priced services, especially if it ends up scooping up Freedom Mobile, a discount carrier that could be up for grabs as a part of the recent RogersShaw deal.

Nobody knows if the risks of expanding into new markets will be worth the reward. After a nearly 16% peak-to-trough plunge, however, I am a fan of the valuation and think the bar has been set low, with many investors scratching their heads over Quebecor’s ambitious long-term growth plans.

Quebecor: Expanding into new markets with a relatively unknown brand

As Quebecor moves into western provinces, I think the firm could be looking at a new subsidiary for itself. After all, Vidéotron may not find a spot with consumers outside of Quebec. Whether or not Quebecor adopts the “Freedom Mobile” banner if such a deal happens remains to be seen. Regardless, I think that switching costs will be low such that the company could carve out a pretty decent chunk of its target market for itself.

Could Quebecor become number four of the Big Four? Or will the Big Three stand their ground, leaving Quebecor with the scraps and, ultimately, a less-than-stellar return in its foray into new markets?

That’s the million-dollar question. Personally, I’d be inclined to give Pierre Karl Péladeau the benefit of the doubt, especially given investors seem skeptical amid the latest dip in shares.

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 has no position in any of the stocks mentioned. The Motley Fool recommends ROGERS COMMUNICATIONS INC. CL B NV.

More on Dividend Stocks

Dividend Stocks

If I Could Only Buy 1 Stock Before 2023, This Would be it!

If you could buy 1 stock before 2023, what would it be? Here’s the stock I’m considering, and I think…

Read more »

Beautiful holiday decorated background with christmas gift boxes ,fir. christmas holiday concept
Dividend Stocks

3 Dividend Stocks to Help Offset Holiday Spending

The holidays are here, and so is the seasonal spending. Offset some of those costs by putting your investment cash…

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

The 3 Passive-Income Stocks I’m Buying Next and Never Selling

These passive-income stocks have a proven track record of growth and a solid sector that will guarantee income for decades.

Read more »

oil and gas pipeline
Dividend Stocks

Enbridge Stock Rose More Than 4.5% in November: Is it a Buy Today?

Enbridge is having a good year. Are more gains on the way for the stock?

Read more »

worry concern
Dividend Stocks

3 Budget Mistakes Almost Everyone Makes

Leave these budget mistakes in 2022 and enter 2023 with more cash on hand and a better way of spending.

Read more »

Target. Stand out from the crowd
Dividend Stocks

Got $1,000? Buy These Up-and-Coming Stocks Before They Take Off

These growth stocks beat the long-term market returns and could continue delivering above-average growth in the coming years.

Read more »

Canadian Dollars
Dividend Stocks

Lazy Income: Earn $550 Per Month in 2023

Lazy income investors looking to establish or grow a monthly income stream should consider these options to bring in $555…

Read more »

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance
Dividend Stocks

Got $2,500? 2 Top Stocks That You Can Buy and Hold for a Lifetime

The market is full of opportunities, including these two stocks you can buy and hold forever.

Read more »