Market Correction: 3 Dirt-Cheap Dividend Stocks to Buy Now

Investors traversing this market correction may want to snatch up cheap dividend stocks like Emera Inc. (TSX:EMA) to start the summer.

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The S&P/TSX Composite Index officially entered a bear market after shedding over 500 points to open the previous week. Investors may be encouraged, as the TSX Index got off to a solid start on Monday, June 20. It rose 253 points with telecom and energy providing the biggest boost. Investors can still hunt for discounts in this market correction. Today, I want to look at three dividend stocks that look undervalued, as we kick off the summer season.

Here’s a utility stock to snatch up in this market correction

Emera (TSX:EMA) is a Halifax-based company that is engaged in the generation, transmission, and distribution of electricity to a wide customer base. Utilities are an essential service that Canadian investors can trust in an uncertain economic climate. Shares of this dividend stock have dropped 7.2% in 2022 as of close on June 20. The stock is still up 1.3% in the year-over-year period.

This company released its first-quarter 2022 results on May 13. It reported adjusted net income of $242 million, or $0.92 per common share — down marginally from $243 million, or $0.96 per common share, in the first quarter of 2021. Emera is set to deploy $3 billion of capital investment that will work to bolster its rate base and further its clean energy push.

Shares of this dividend stock possess a solid price-to-earnings (P/E) ratio of 25. Moreover, it offers a quarterly dividend of $0.662 per share. That represents a 4.5% yield. This is a stock you should consider snatching up in this market correction. It last had an RSI of 25, which puts Emera in technically oversold territory.

You can depend on this discounted dividend stock for the long haul

The telecom space led the way on the TSX on June 20. BCE (TSX:BCE)(NYSE:BCE) is one of the largest telecoms available on the Canadian market. Shares of this dividend stock have dropped 4.8% so far this year. The stock is still up 2.4% from the previous year.

In Q1 2022, the company delivered adjusted EBITDA growth of 6.4% to $2.58 billion. Meanwhile, adjusted net earnings increased 15% year over year to $811 million. Adjusted earnings per share (EPS) jumped 14% to $0.89.

BCE last had an attractive P/E ratio of 19. The market correction has taken its toll as this dividend stock currently possesses an RSI of 30. That puts BCE just outside technically oversold levels. It offers a quarterly dividend of $0.92 per share, representing a strong 5.8% yield.

One more cheap dividend stock to snag in this market correction

Enbridge (TSX:ENB)(NYSE:ENB) is the third dividend stock I’d look to snatch up in this market correction. This energy infrastructure giant has seen its stock increase 6.8% in the year-to-date period. Its shares are up 7% compared to the same period in 2021.

The company unveiled its first-quarter 2022 earnings on May 6. Enbridge reported cash provided by operating activities of $2.9 billion — up from $2.6 billion in the first quarter of 2021. Meanwhile, adjusted EBITDA rose to $4.1 billion compared to $3.7 billion in the prior year.

This dividend stock possesses a favourable P/E ratio of 18. It currently has an RSI of 26, putting Enbridge in technically oversold territory. Better yet, investors battling the market correction can gobble up its quarterly dividend of $0.86 per share. That represents a tasty 6.5% yield.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends EMERA INCORPORATED and Enbridge.

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