3 Oversold Dividend Stocks for $1,000 in Annual Passive Income

Even with shares falling to oversold levels, these three passive-income stocks offer $1,000 in annual income for Motley Fool investors right now!

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Oversold stocks can offer Motley Fool investors substantial opportunities — especially if those stocks involve passive income. And that’s what we’re going to focus on. These three stocks remain strong choices for any passive-income portfolio, especially if you’re looking for annual dividends.

Let’s not delay any longer.

Sleep Country

Sleep Country Canada (TSX:ZZZ) continues to expand its offerings, seeing a major increase in online sales. The Canadian company has also made partnerships with store locations to sell their lines of mattresses and other items related to the sleep “ecosystem.”

Yet right now, Sleep Country stock remains a passive-income stock that’s down 33% year to date. It’s now in oversold territory as of writing, with a relative strength index (RSI) of 28.57. Its trailing price-to-earnings ratio sits at 10.5, and it trades at 2.28 times book value. It’s well within value territory.

That makes it a great time to consider it for its dividend a 3.13% — especially as analysts predict the stock to bounce back, perhaps for earnings this week.


Bank of Nova Scotia (TSX:BNS)(NYSE:BNS), better known as Scotiabank, is another strong choice among oversold stocks. It’s one of the Big Six banks offering protection during an economic downturn. Many analysts believe it is likely to make a return to pre-crash levels.

When it does, its oversold rating at 31.75 RSI could fall even lower. For now, it’s still valuable trading at 10.36 times earnings and 1.48 times book value. In this case, shares are down about 8% year to date as of writing. That could fall even further in a recession but will merely climb back up. So, any time is a good time to consider a Big Six bank stock like this — especially when you get passive income. With Scotiabank, you’ll lock in a dividend yield of 4.92% at writing.

Great-West Lifeco

Finally, Great-West Lifeco (TSX:GWO) is another of the oversold stocks I’d consider for passive income. The insurance and financial company has exposure all over the world. And it continues to expand through acquisitions as well, recently purchasing the Prudential Financial retirement business for $4.45 billion.

So, the company seems to be doing quite well. And yet it remains in oversold territory with an RSI at 29.85. Further, it trades at 10.37 times earnings and 1.35 times book value. That definitely makes it a valuable stock. And now shares are down 8% year to date. That would make it a solid time to pick up the passive-income stock with a dividend of 5.64%.

Foolish takeaway

To make $1,000 in annual passive income, you would need to invest $5,926 in Great-West, $6,880 in Scotiabank, and $10,703 in Sleep Country. That would add up to $23,509, well within your Tax-Free Savings Account contribution room. Therefore, Motley Fool investors can look forward to tax-free passive income each and every year!

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA.

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