There are a lot of dividend stocks trading at a discount right now. That is, a discount relative to where these stocks were only a few months ago. But that doesn’t mean these stocks are valuable. And it certainly doesn’t mean that these are stocks you should buy and hold forever.
So today, I’m going to look at two dividend stocks that are down, but not out. Each offers you lifetime income thanks to high dividend yields. What’s more, they may be down now, but these stocks have a solid track record spanning decades, so you can be certain they will recover.
Here are the two no-brainer dividend stocks I would buy and hold forever.
BCE
BCE (TSX: BCE)(NYSE: BCE) is a strong choice for a few reasons. First off, it’s the largest of the telecommunications companies out there, in terms of both market capitalization and market share. Also, BCE stock managed to come out ahead of the others during the pandemic. It had its wireline business up and running, which it continues to roll out along with its 5G network.
Strong growth has continued even in the face of inflation and interest rate hikes. BCE stock recently reported its earnings, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) up 4.6% year-over-year. As a result, it was able to reconfirm all of its 2022 financial guidance targets.
Furthermore, BCE stock is one of the dividend stocks offering a superb yield at 5.65% as of this writing. Investors can therefore latch onto estimate-beating earnings, stable share growth, and stellar dividends. All while shares trade down 10% from 2022 highs.
As of this writing, a $10,000 investment in BCE stock would bring in about $567 in annual income.
BMO
Another no-brainer dividend stock to consider is Bank of Montreal (TSX: BMO)(NYSE: BMO). BMO stock is one of the best out there not only because it’s a bank stock, but it’s the bank stock that is growing the most. It recently entered the U.S. market with the acquisition of Bank of the West. And even in the face of interest rate hikes leading to a drop in loans, its provisions for loan losses has allowed BMO stock to continue making major acquisitions.
Earnings are due for BMO stock on Aug. 30, but we can still get a glimpse of its performance from last quarter. In fact, during the last quarter, its dividend alone increased 31% year-over-year. Net income increased 37.7% year-over-year, with reported earnings per share up $1.91 to $7.13.
Right now, you can grab onto dividend stocks like BMO that trade for a valuable 7.11 times earnings. Plus, it offers a substantial yield of 4.31%. And I would lock this in before earnings potentially see shares climb higher. Those shares remain down by 14% from 52-week highs.
As of this writing, a $10,000 investment in BMO stock would bring in $434 in annual income.
Bottom line
When it comes to dividend stocks, these two are no-brainers. They have decades of growth behind them, so you can count on decades more in the future. Furthermore, these companies have both increased dividends again and again, providing you with an even greater passive income stream.
