3 Dirt-Cheap Dividend Stocks to Buy Now

Market volatility should drive investors to buy undervalued dividend stocks like Allied Properties REIT (TSX:AP.UN) and others today.

The S&P/TSX Composite Index shed 91 points on September 16. The only sectors that enjoyed an uptick were financials and information technology. Canadian investors appear anxious ahead of the federal election on September 20. However, if polls are to be believed, it seems that the election will not result in a change of leadership. In any case, investors may be looking to protect themselves from inflation and uncertainty. Today, I want to look at three cheap dividend stocks that are worth picking up right now.

Here’s why investors should snatch up this promising REIT in September

Earlier this week, I’d looked at one of my favourite REITs on the TSX. Allied Properties REIT (TSX: AP.UN) is another REIT that is worth your attention. It owns, manages, and develops urban workspace in major metropolitan areas and network-dense urban data centres. Shares of this dividend stock have climbed 11% in 2021 as of close on September 16.

The REIT unveiled its second-quarter 2021 results on July 26. Adjusted EBITDA increased 6.8% from the prior year to $91.2 million. Net income rose 6% year over year to $98.5 million. Meanwhile, adjusted funds from operations (AFFO) climbed 11% to $67.9 million.

Allied Properties REIT last paid out a monthly distribution of $0.142 per share. That represents a solid 4% yield. Shares of this dividend stock last had a favourable price-to-earnings (P/E) ratio of 16.

This cheap dividend stock is very dependable

ATCO (TSX: ACO.X) is a Calgary-based company that provides housing, logistics and transportation, agriculture, water, real estate, and energy and energy infrastructure solutions in Canada and around the world. Shares of this dividend stock have increased 12% in the year-to-date period. The stock is down 5.3% month over month.

The company unveiled its second-quarter 2021 results on July 29. It delivered adjusted earnings of $80 million, or $0.70 per share, in Q2 2021 — up from $70 million, or $0.61 per share, in the previous year. Moreover, it declared a third-quarter dividend of $0.4483 per share. That represents a 4.4% yield.

Shares of this dividend stock possess a P/E ratio of 21. That puts ATCO in favourable value territory relative to its industry peers. Now is a great time to snatch up this solid dividend payer on the dip.

One more undervalued dividend stock to buy today

Transcontinental (TSX: TCL.A) is the third undervalued dividend stock I want to zero in on today. The Montreal-based company is engaged in the flexible packaging business in Canada and around the world. Its shares have climbed 5.2% so far this year. However, the stock has plunged 15% month over month.

Shares of Transcontinental dipped sharply following its third-quarter 2021 earnings release. Revenue rose 5.8% year over year to $621 million. However, it took a hit in other major categories. Adjusted operating earnings dipped 34% to $67.4 million. Moreover, adjusted net earnings declined 35% to $44.2 million. Management pointed out that the company faced challenges in the form of resin price hikes, the reduction in the Canada Emergency Wage Subsidy, and the exchange rate variation.

This dividend stock last paid out a quarterly dividend of $0.225 per share, which represents a solid 4.2% yield. Better yet, Transcontinental possesses an attractive P/E ratio of 13.

Fool contributor Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool recommends TRANSCONTINENTAL INC A.

More on Dividend Stocks

Concept of rent, search, purchase real estate, REIT
Dividend Stocks

The Best Monthly-Paying Dividend Stock on the TSX Right Now

This monthly dividend stock offers an attractive mix of nearly 5% yield, monthly distributions, and a deeply discounted unit price…

Read more »

Warning sign with the text "Trade war" in front of container ship
Dividend Stocks

The Trade War Is Raising Prices Again: This Canadian Grocer Can Protect Its Margins

Trade tensions can raise specific retail costs even when overall grocery inflation is slowing, putting purchasing scale at a premium.

Read more »

Forklift in a warehouse
Dividend Stocks

Apartment Rents Are Slowing: I’d Buy This Canadian REIT Instead

Cooling apartment asking rents make industrial real estate worth another look for investors seeking a different source of monthly income.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

3 Ways to Maximize Your TFSA Before Year-End

Maximize your TFSA before year-end with three different approaches to investing for long-term income and growth.

Read more »

monthly calendar with clock
Dividend Stocks

Turn Your TFSA Contribution Room Into $92 of Monthly Income

These high yield Canadian stocks offer monthly payouts and have sustainable payouts to generate steady recurring income.

Read more »

runner checks her biodata on smartwatch
Dividend Stocks

A 7% Yield Won’t Protect You From a Dividend Cut: This Payout Looks Safer

A smaller dividend backed by growing earnings can be more useful in retirement than an unsustainable headline yield.

Read more »

money goes up and down in balance
Dividend Stocks

One $7,000 TFSA Contribution Could Grow Into $50,000: Here’s How Long It Takes

Once the money is inside a TFSA account, a $7,000 investment can become $10,000, $20,000, or considerably more with compounding,…

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

You’ve Maxed Your TFSA – Now What?

Maxed your TFSA? These three Canadian growth stocks can help investors keep building wealth while they plan their next investing…

Read more »