3 Canadian Dividend Stocks to Buy Now While They Still Offer High Yields

These Canadian dividend stocks have sold off lately and now offer incredibly attractive yields, making them some of the best to buy now.

| More on:
Increasing yield

Image source: Getty Images

Canadian dividend stocks are some of the best to buy when the entire market is selling off. In this environment, high-quality dividend stocks can add more stability to your portfolio and will return cash you can use to buy more stocks.

Buying any stock undervalued is great and, of course, the goal of investors. But with dividend stocks, in addition to having more upside potential when they are cheap, they also offer higher yields.

If you’re looking to add high-quality dividend stocks to your portfolio and boost your passive income, here are three stocks that you’ll want to buy now while you can lock in some attractive yields.

This top Canadian utility stock has been trading with a yield above 5%

Utility stocks are some of the most defensive and least volatile stocks you can buy. So, in the current market environment, they are some of the top investments to make. And considering how cheap Algonquin Power and Utilities (TSX:AQN)(NYSE:AQN) has been lately, it’s one of the best Canadian dividend stocks to buy now.

Because utilities are such strong companies with highly reliable income, they typically trade with lower dividend yields. Fortis, one of Algonquin’s utility peers, currently has a yield of roughly 3.3%.

So, Algonquin, which currently offers a yield of more than 5% and should continue to grow its dividend at an equal or faster pace than Fortis over the next few years, looks highly attractive at these prices.

I’d look to buy Algonquin soon, though. The stock has been gaining value in recent trading sessions, and the dividend yield has been falling rapidly. If you’re looking for some of the best Canadian stocks to buy, Algonquin is one I’d look to buy right now.

A royalty stock that’s perfect for dividend investors

Another excellent dividend stock that’s recently pulled back from its highs and now offers an extremely attractive dividend yield of 6.3% is Pizza Pizza Royalty (TSX:PZA).

Pizza Pizza is one of the best Canadian stocks to buy now, because it’s one of the best investments that dividend investors can make since the stock is constantly returning cash to investors every month.

The company is set up to constantly receive cash from its royalty pool of Pizza Pizza and Pizza 73 locations, which it pays tax on and then turns right around and returns to investors.

The sales are incredibly resilient. So, while there are concerns about how inflation may impact Pizza Pizza, the company is well positioned to weather the storm, and the impact investors will notice would likely be minimal.

Therefore, with the stock pulling back by nearly 15% off its high and offering an impressive yield of 6.3%, there’s no question Pizza Pizza is one of the best Canadian dividend stocks to buy now.

One of the best and most resilient Canadian dividend stocks to buy now

Although utilities are some of the safest stocks you can buy, usually consumer staples are some of the next best investments to consider. And right now, North West Company (TSX:NWC) offers a dividend yield above 4%. So, it’s easily one of the best Canadian stocks to buy now.

Consumer staples can be high-quality investments because they sell essentials that consumers need to buy. Therefore, even if incomes are being affected, whether by a recession or by rapid inflation, if consumers are lowering their spending, it’s usually not for staples such as food.

Consumer staple stocks can often pass along price increases to their customers. However, with inflation so significant today and several supply chain issues, some consumer staples are struggling in the current environment.

In recent years, North West has done a tonne of work to vertically integrate parts of its business and bring more costs in-house to try and improve margins. So, while there may be some risk with North West today, it should be able to weather the storm better than many of its peers and much better than most other Canadian stocks.

Therefore, with the stock trading more than 10% off its high, offering a yield of roughly 4% and due for a dividend increase in the near term, it’s certainly one of the best Canadian stocks to buy now.

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 Daniel Da Costa has positions in ALGONQUIN POWER AND UTILITIES CORP. and THE NORTH WEST COMPANY INC. The Motley Fool has positions in and recommends PIZZA PIZZA ROYALTY CORP. The Motley Fool recommends FORTIS INC and THE NORTH WEST COMPANY INC.

More on Dividend Stocks

Question marks in a pile
Dividend Stocks

Where Will Brookfield Infrastructure Partners Stock Be in 5 Years?

Brookfield Infrastructure Partners (TSX:BIP.UN) kicked off 2024 with a bang. Where will it be in five years?

Read more »

Dividend Stocks

Golden Years Gain: Your CPP Benefits at Age 70

CPP users delaying pension payments until 70 will receive substantial monthly income streams in the golden years.

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

3 Dividend Stocks You Can Safely Hold for Decades

Top TSX dividend stocks are on sale.

Read more »

Dividend Stocks

Where Will Canadian Utilities Stock Be in 5 Years?

Canadian Utilities (TSX:CSU) is a classic example of a stock where the dividend is all you get. Can the company…

Read more »

Man holding magnifying glass over a document
Dividend Stocks

2 Stocks I’m Watching for Big Passive Income

Consider Bank of Nova Scotia (TSX:BNS) and another top passive-income play to power your dividend portfolio!

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

These top TSX stocks have increased their dividends annually for decades.

Read more »

bulb idea thinking
Dividend Stocks

2 Supercharged Dividend Stocks to Buy if There’s a Stock Market Sell-Off

These two top stocks offer attractive yields, have reliable operations and are dividend aristocrats, making them two of the best…

Read more »

question marks written reminders tickets
Dividend Stocks

Better Buy: Loblaw Companies or Metro Stock?

Loblaw Companies (TSX:L) stock is riding on recent momentum. Meanwhile, Metro (TSX:MRU) is executing for future earnings growth.

Read more »