1 Oversold Dividend Stock (Yielding 6%) to Buy Before the New Year

Right now is a great time to pick up this dividend stock that holds Aristocrat status and see shares bring in potentially $1,400 in returns within a year!

| More on:

Image source: Getty Images

The New Year is fast approaching, but rather than many of us thinking it’s going to be a time of renewal, we’re terrified. Economists continue to tell us that a recession is coming. While it might not be as bad as the Great Recession, it could last until mid-2023. That’s still a long time considering what we’ve already been through.

Still, it also doesn’t mean investors should start panicking — especially when it comes to investing cash they’ve put aside to invest in the first place. The goal of investing should be to create long-term income. With that in mind, there’s actually one oversold dividend stock I would consider buying before the end of 2022 is up.

BCE stock

BCE (TSX:BCE) is a strong choice for anyone looking to find a long-term option for their portfolio. Whether it’s your retirement savings, wedding planning, or buying a home, any goal can be met by choosing BCE stock as one of your investment options — especially right now.

BCE stock is a dividend stock that’s currently in oversold territory. However, it really doesn’t deserve that low share price. The main reason for a recent drop actually comes from competitor Rogers. The company announced that it’s more likely than ever to go through with the acquisitions of Shaw.

Even still, this really has nothing to do with BCE stock and its performance. And until the ink is dry on the deal, BCE stock is still the largest of the telecommunications companies out there. But there’s more reasons to buy BCE stock.

So cheap!

BCE stock currently trades at a Relative Strength Index (RSI) figure of 29 as of writing. That puts it just within oversold territory. It now trades near value territory at just 19.48 times earnings and three times book value. Plus, shares are now down 3.7% year to date. That’s a drop to get in on, especially considering long-term performance.

BCE stock is a dividend stock that’s seen immense growth in the last few decades. After the dot-com bubble burst, BCE stock has been on a strong trajectory upwards since that time. Shares are up 138% in the last decade alone, boasting a compound annual growth rate (CAGR) of 9.03% for that time.

So much passive income

With these cheap rates in mind, you can also lock up a massive amount of passive income from this dividend stock. BCE stock currently holds a dividend yield at 5.96%. That comes to $3.68 per share as of writing, with shares trading at about $60 as of writing.

So, let’s say you had $5,000 you wanted to use to contribute before the end of 2023. I would take that cash and put it towards BCE stock. Here is how much passive income you could receive from that investment.


Investing now would give you $305.44 per year, or $76.36 per quarter. That’s without shares rising a penny! However, should your shares rise to former 52-week highs, that $5,000 would turn into $6,149.47. If we add in your passive income from dividends, that’s a total of $6,454.91!

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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

protect, safe, trust
Dividend Stocks

Worried About a Recession? 2 TSX Blue-Chip Stocks to Protect Your Capital

If you fear a recession coming on soon, here are two blue-chip Canadian stocks to add to your portfolio for…

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

New TFSA Investors: 2 Top TSX Stock to Create a Self-Directed Retirement Fund

Top TSX dividend stocks are now on sale for new TFSA investors.

Read more »

money while you sleep
Dividend Stocks

Worried About the Market? 2 Dividend Stocks That Let You Sleep at Night

Here's why Restaurant Brands (TSX:QSR) and Enbridge (TSX:ENB) are two top dividend stocks to buy in this uncertain market right…

Read more »

money cash dividends
Dividend Stocks

How 1 Absurdly Cheap Stock Can Generate $100 in Monthly Passive Income

You can generate $100 or more in monthly passive income from one high-yield stock trading at an absurdly cheap price…

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

How I’d Invest $1000 in February to Make Easy Passive Income

Looking to earn some extra passive income in February but don't have much cash? Build an easy portfolio with these…

Read more »

sad concerned deep in thought
Dividend Stocks

Is it Worth Investing in Rogers or Shaw Before the Pending Merger?

A Rogers stock and Shaw stock deal looks all but certain, yet should investors still buy the stock? Or are…

Read more »

runner ties shoe while stopped on grass outside
Dividend Stocks

Is Nutrien Stock a Buy in February 2023?

Nutrien stock should benefit from the very favourable supply/demand fundamentals in the agriculture business in 2023.

Read more »

Dividend Stocks

Is Brookfield Asset Management a Buy in February 2023?

Brookfield Asset Management is among the largest stocks trading on the TSX. Let's see why BAM stock is a buy…

Read more »