2 Dividend Stocks That Are Still Way Cheaper Than Necessary

These dividend stocks trade in value territory offering substantial dividend yields and solid results, so why is no one picking them up?

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published March 28, 2023 1:30 pm EDT

So, you want dividends, but you also want a deal. Luckily for you, there are plenty out there to be had. But not necessarily all of them are the best deal in the long term — that is, unless you’re looking at these two dividend stocks.

sale discount best price — Image source: Getty Images

NorthWest REIT

NorthWest Healthcare Properties REIT (TSX:NWH.UN) is a super long-term deal among dividend stocks today. It ticks all the boxes. First off, there’s the business itself. NorthWest stock invests in healthcare real estate across the world. It holds a diverse set of properties, with the average lease agreement at 14 years as of writing and an occupancy rate at 97%.

During this downturn, NorthWest stock continues to do well, as they long-term lease agreements hold up the business. In fact, it’s continued to grow as well, acquiring new properties that now include in the United States.

Yet shares of the stock trade at just 7.62 times earnings as of writing. What’s more, those shares are down a whopping 39% in the last year alone! With the market showing signs of positive movement lately, and earnings coming out Mar. 31, NorthWest stock might not remain down for much longer.

If you were to pick up NorthWest stock at the time of writing this article, you would bring in a dividend yield at an incredible 9.06%.

Nexus REIT

While Nexus Industrial REIT (TSX:NXR.UN) might not have as high a dividend yield as NorthWest stock, it’s still definitely worth your consideration. And for much of the same reasons. Industrial properties are also in a stage of growth and remain stable. That’s because you really just need one business to lease these properties, rather than try and fill them with a bunch of businesses.

Furthermore, the world continues to be in desperate need of industrial properties — Canada, in particular. So, with Nexus stock continuing to expand, making acquisitions, even during this downturn, it just shows that there is true value here for those seeking strong dividend stocks.

Nexus stock, however, trades at just 5.36 times earnings as of writing, with shares down about 26% in the last year alone. That’s despite recently reporting full-year earnings that showed a 97% occupancy rate and operating income up 71% from the year before.

With that in mind, it’s a great time to pick up Nexus REIT as well with a dividend yield at 6.65% at the time of writing.

Bottom line

These deals aren’t going to wait around forever, but bottom line here is that both Nexus REIT and NorthWest stock are strong long-term holds. Both are in solid industries that aren’t going anywhere and indeed continue to grow year after year.

Furthermore, each of these REITs offer substantial income through their yields. These dividend stocks offer yields far higher than you’ll see a year from now. That makes it a fantastic time to pick them up for a deal, rather than waiting for another drop and miss out on passive income in the meantime. And when it comes to these two dividend stocks, you won’t likely wait long for a recovery.