3 Unreasonably Cheap Canadian Dividend Stocks

Dividend stocks like Power Corp of Canada are undervalued.

| More on:
edit Sale sign, value, discount

Image source: Getty Images

There are plenty of dividend stocks on the Canadian stock market. But which should you choose? The blue chip stocks offer low yields while the high-yield stocks are too risky for most investors. With that in mind, here are some of the most undervalued Canadian stocks with the best dividend yields. 


SmartCentres REIT (TSX:SRU.UN) has been caught up in the global real estate crash. Residential real estate was severely overvalued while commercial properties took a blow during the pandemic. Now, rising rates are making the real estate investment game much more difficult. That’s why real estate investment trusts (REITs) are in a bear market. 

Over the past two months, SmartCentres has also lost 9% of its value. Now, the stock trades at $26 – just 9 times earnings per share. Meanwhile, the dividend yield is 7.1%. The company’s diversified portfolio puts it in a better position than the rest of the industry.  

Alaris Equity

Alaris Equity Partners Income Trust (TSX:AD) is another undervalued dividend opportunity. The company offers growth capital to mid-sized private companies. In exchange, it receives preferred equity stakes that provide high dividend yields and consistent cash flows. 

Much of this recurring cash flow is paid out to shareholders. Traditionally, the company offered a monthly dividend payment but the team recently decided to move to a quarterly schedule. Investors can now expect over $1.33 in annual dividend payments – which implies a dividend yield of 8.2%. 

Alaris stock trades at just 6.3 times earnings. That implies an earnings yield of nearly 16%.  

The stock is down 17% over the past year as investors worry about a recession. However, if Alaris manages risk appropriately, it should see consistent dividend income and perhaps some better investment opportunities in this environment. 

Power Corp

Power Corporation of Canada (TSX:POW) is another underrated dividend stock that should be on your radar. The financial conglomerate offers services across North America, Europe, and Asia. It also owns meaningful stakes in emerging financial technology startups like Wealthsimple. 

The conglomerate’s portfolio includes well-known and well-established financial brands like Lifeco and IGM Financial. This provides it a robust base of consistent earnings. 

Power Corp stock is up 7% year to date. Despite this, POW stock is still trading at 11 times earnings because the price is 22% lower than last year. It also offers a sizable 5.7% dividend yield. 

As the Bank of Canada pauses its rate hiking cycle and bond yields plummet, Power Corp. could be in a strong position for a rebound. Keep a close eye on this dividend income opportunity.  

Bottom line

Canada’s most underrated stocks offer the perfect mix of high dividend yield and low valuation. Add them to your watch list right away. 

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 Vishesh Raisinghani has no position in any of the stocks mentioned. The Motley Fool recommends Alaris Equity Partners Income Trust and SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Growing plant shoots on coins
Dividend Stocks

3 Magnificent Ultra-High-Yield Dividend Stocks That Are Screaming Buys in April

High yield stocks like BCE (TSX:BCE) can add a lot of income to your portfolio.

Read more »

grow money, wealth build
Dividend Stocks

1 Growth Stock Down 24% to Buy Right Now

With this impressive growth stock trading more than 20% off its high, it's the perfect stock to buy right now…

Read more »

Dividend Stocks

What Should Investors Watch in Aecon Stock’s Earnings Report?

Aecon (TSX:ARE) stock has earnings coming out this week, and after disappointing fourth-quarter results, this is what investors should watch.

Read more »

Freight Train
Dividend Stocks

CNR Stock: Can the Top Stock Keep it Up?

CNR (TSX:CNR) stock has had a pretty crazy last few years, but after a strong fourth quarter, can the top…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Dividend Stocks

3 Stocks Ready for Dividend Hikes in 2024

These top TSX dividend stocks should boost their distributions this year.

Read more »

pipe metal texture inside
Dividend Stocks

TC Energy Stock: An Undervalued 7.8% Dividend Stock

TC Energy stock appears to be trading at a discount of about 20%.

Read more »

Man data analyze
Dividend Stocks

1 Dividend Stock Down 13% to Buy Right Now

Parkland (TSX:PKI) stock may be down by 13%, but shares are still way up in the last year. So, this…

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Dividend Stocks

TFSA 101: How Pensioners Can Earn $4,987.50 Per Year in Tax-Free Passive Income

Retirees can use this TFSA strategy to boost portfolio yield while reducing risk.

Read more »