ALERT: 3 Cheap Dividend Stocks to Buy Now

Canadians should be quick to snatch up undervalued dividend stocks like Sienna Senior Living Inc. (TSX:SIA) instead of going away in May.

Ambrose O'Callaghan

Ambrose O'Callaghan graduated with a BA in Political Science from McMaster University. After that, he jumped into the banking world. He worked from the front line to an investment associate role. After that, he found a way to marry his experience and knowledge in the world of banking and finance to his love and passion for writing. Ambrose is a passionate believer in Warren Buffett's value investing model.

Published May 7, 2022 11:00 am EDT

North American markets were battling turbulence coming into the month of May. The first week has provided a roller-coaster start to what is typically viewed as a crucial month for investors. Some readers may recall the adage, “sell in May and go away,” which posits that it is better for investors to take profits and remain on the sidelines in the spring and early summer. We are going to take a different angle.

Today, I want to look at three discounted dividend stocks that are worth snatching up in this volatile market.

Why I’m still excited about this monthly dividend stock

Sienna Senior Living (TSX: SIA) is the first dividend stock I’d consider snatching up in the first half of May. This Markham-based company provides senior living and long-term-care (LTC) services to Canadians. Its shares have dropped 8.7% in 2022 as of close on May 4. This has pushed the stock into negative territory in the year-over-year period.

In the past, I’ve suggested that investors snatch up Sienna Senior Living due to Canada’s aging population. Investors can expect to see its first-quarter 2022 results in the early afternoon on May 13. In 2021, it saw revenues rise marginally to $668 million. Meanwhile, EBITDA climbed to $110 million compared to $91.9 million in 2020.

Shares of this dividend stock currently possess a price-to-earnings ratio of 31. That puts Sienna just outside technically oversold territory. Meanwhile, it offers a monthly dividend of $0.078 per share. This represents a tasty 6.7% yield.

Don’t sleep on this cheap REIT in early May

Allied Properties REIT (TSX: AP.UN) is a real estate investment trust (REIT) that has flashed buy signals in the first week of May. This Toronto-based REIT owns, manages, and develops urban office environments. Shares of this dividend stock have dropped 7% in the year-to-date period. This has also put Allied Properties in the red year over year.

The REIT released its first batch of 2022 earnings on April 27. Total assets increased 24% from the previous year to $11.4 billion. Meanwhile, NAV per unit jumped 4.5% to $50.92. Annualized adjusted EBITDA climbed 3% from the previous year to $366 million.

This dividend last possesses an attractive price-to-earnings ratio of 9.5. Better yet, it dipped into oversold levels below an RSI of 30 in late April and early May. Allied Properties offers a monthly distribution of $0.146 per share. That represents a 4.2% yield.

One more discounted dividend stock to buy now

In September 2021, I’d discussed why Saputo (TSX: SAP) was one of my favourite stocks to snatch up with some extra cash. Shares of this dividend stock have dropped 6.3% so far in 2022. Worse, it has plunged 31% year over year. Despite that, I’m still bullish on this top dairy processor, which should be able to take advantage of food price inflation.

The company delivered revenue growth of 3.7% to $3.90 billion in the third quarter of fiscal 2022. However, earnings have been hit by challenging market conditions, supply chain issues, labour shortages, and inflationary pressures. That said, its Canadian sector has continued to show improvement. Shares of this dividend stock are trading in favourable value territory compared to its industry peers. It offers a quarterly dividend of $0.22 per share, representing a 2.6% yield.