1 “Flatlined” Dividend Stock That Could Come Alive Soon

Quebecor (TSX:QBR.B) stock is a deep-value dividend stock that could have a few catalysts up its sleeves.

| More on:
falling red arrow and lifting

Image source: Getty Images

Investors should temper their returns expectations after a brutally bearish year for broader stock markets. Indeed, the tech boom of 2021 led to its inevitable bust. With interest rates rising in the U.S. to beat inflation down to more manageable levels, investors have been bracing for more rate-related pain.

With two regional bank failures in the U.S., one can’t help but feel just a bit on edge. Bank failures are scary. And a contagion could make things far worse. For now, the contagion risk is low, despite jitters sent down the spines of some of the European banks, which have spooked markets in recent trading sessions.

The key to investing amid bearish conditions?

Even if the bear is nearing its end of life, investors shouldn’t chase battered stock with the expectation of a fast recovery. Indeed, Charlie Munger (Warren Buffett’s right-hand man) says that the key to a happy life is to lower expectations.

With low expectations, you can surprise and delight yourself. Not only may low expectations be key to overall life satisfaction or general happiness, but low expectations amid bearish conditions can lead you toward sound investments that help you power solid returns without having to risk your shirt.

You see, high expectations for market returns can lead you towards the riskiest and most dangerous stocks in the market. If your expectations are more realistic, you can pick up shares of a company that can generate solid, more predictable results over time.

Deep value and predictability of cash flows in the face of uncertainty are what investors should strive for to make it through the last stretch of this bear market. That way, you’ll likely set the stage for good results (on a relative basis), regardless of where the broader stock market averages head next.

In this piece, we’ll look at one “flatlined” stock that I believe has really low expectations baked in. Such modest expectations could accompany impressive results down the road.

Quebecor

Quebecor (TSX:QBR.B) is a regional telecom that doesn’t get a lot of attention from the mainstream financial media. On any given day, there are “sexier” plays to give one’s attention to. However, longer-term, I view Quebecor as one of the best long-term value plays to build wealth over the next 15 years.

Indeed, the regional telecom has done quite well for investors over the past five years. The stock returned around 29%. And that’s not including the bountiful dividend, which currently yields 3.74%. In recent years, the dividend yield has crept higher as the stock stalled out.

Shares are where they were back in April 2019. Having not gone anywhere for four years, I view Quebecor as a compelling consolidated play that could be in a spot to pop like a coiled spring at some point down the road. Nobody knows when, but I think Quebecor has a lot to prove, as it looks to expand outside Quebec.

The Canadian telecom scene is ripe for disruption. And Quebecor is a fine candidate to rise to a challenge to get the big telecoms to lower prices. Recently, Quebecor was reported to work with the government in an effort to help drive wireless prices down. I feel the news was big but flew under the radar of most.

Quebecor stock is a value gem at 12.3 times trailing price to earnings.

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 Joey Frenette 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 Investing

Target. Stand out from the crowd
Dividend Stocks

RRSP Pension: 2 Dividend Stocks to Buy on the Latest Dip

These high-yield TSX stocks look cheap right now for RRSP investors.

Read more »

bulb idea thinking
Investing

The Smartest TSX ETF to Buy With $1,000 Right Now

Forget the TSX 60 or the TSX Composite. I prefer the TSX Dividend Aristocrats.

Read more »

Canada Day fireworks over two Adirondack chairs on the wooden dock in Ontario, Canada
Retirement

CPP Benefits Not Enough? This Top Dividend Stock Can Help Fund Your Retirement

Canadian retirees can look to supplement their CPP payout with quality dividend stocks such as Headwater Exploration.

Read more »

grow dividends
Stocks for Beginners

Why Cargojet Stock Is Surging Past 52-Week Highs

Cargojet (TSX:CJT) stock surged by 17% after a new deal was announced, with upgrades coming in as well for the…

Read more »

protect, safe, trust
Investing

It’s Time to Defend Your Wealth: 3 Top Stocks to Help Keep What’s Yours

For those looking to defend your wealth against what appear to be robust oncoming macro headwinds should consider these stocks.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

Safe and Sound Stocks for Canadians: My Top 5 Choices

Five safe stocks to buy on a market pullback.

Read more »

Financial technology concept.
Investing

Couche-Tard Stock: Today Is a Huge Buying Opportunity

Alimentation Couche-Tard (TSX:ATD) stock looks like a steal after its latest unwarranted plunge into a correction again.

Read more »

A stock price graph showing growth over time
Metals and Mining Stocks

Why Cameco Stock Soared 23% This Year

Cameco stock continues to ride high on strong supply/demand fundamentals and growing momentum in the nuclear industry.

Read more »