Investors seeking out income through dividend stocks have the pick of the litter these days. But what if there were companies that offered more than just a strong dividend yield — companies that offered significant value, especially when looking at how these companies performed in the past?
Today, I’m going to look at three dividend stocks that you can pick up now while practically guaranteeing a return to pre-drop prices within the next year. More than that, it means you’re going to be buying up these stocks to lock in a higher annual dividend yield. Much higher than you would get at “normal” prices.
When a recession ends, you’ll be glad you bought these three dividend stocks at a major discount. Let’s get right into it.
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TD stock
One of the top investments you can practically always count on is a solid Big Six bank. Toronto-Dominion Bank (TSX: TD) definitely belongs in a top spot, given it’s usually tied for first of the largest of the Big Six banks. But right now, it offers a major deal for those seeking entry in this ever-expanding operation.
TD stock continues to be one of the top 10 banks in the United States. Further, it’s expanded into wealth and commercial management, made solid credit card partnerships, and offers a slew of loan options for customers. That last part is particularly important at this point in time.
Yet TD stock continues to trade in value territory at 9.4 times earnings, with shares down 12.3% in the last year alone. It’s also down 18% from 52-week highs. Today you could lock up its 4.38% dividend yield, and see shares climb 22% back to those heights, bringing in more passive income than you would at those levels.
Nutrien
While TD stock has history behind it to go on, Nutrien (TSX: NTR) doesn’t. But don’t count that against the company. The world needs arable land, and to get it we’re going to need crop nutrients, of which Nutrien stock continues to be the top supplier, especially with sanctions continuing against Russia.
Nutrien stock proved its worth during the pandemic, expanding its online operations and continuing to expand organically and through acquisitions. Now, it’s proving its worth through its fundamentals. Nutrien stock trades at just 5.11 times earnings as of writing, with a dividend yield at 2.64%.
What’s more, shares are down quite far from 52-week highs. While the stock is one of the dividend stocks up 9.6% in the last year, it’s down 34% from 52-week highs. So, you can lock in that yield and look forward to the day when shares climb 52% to reach that point once more.
CAPREIT
Finally, another valuable company I would buy up today is Canadian Apartment Properties REIT (TSX: CAR.UN). CAPREIT promises exposure to the apartment property sector, of which there is a growing need across Canada.
Canada remains one of the least affordable places on the planet to live. The recent downturn in housing may not seem that great, but the correction was needed. And it’s causing many to realize that maybe buying a house isn’t in their budget. And frankly, there’s nothing wrong with that! The world over rents, so it’s time we caught up.
That is why CAPREIT is such a solid long-term option. With the population of our country only rising higher, rental properties are going to continue climbing in necessity and therefore in price. This provides a strong outlook for this stock, which currently trades at just 15.11 times earnings with a 3.4% dividend yield. It remains down about 25% in the last year and 24% from 52-week highs. That would mean a rebound of 32% back to those highs!
