Is your portfolio diversified? When the market takes a dip, as it has this past year, investors are reminded of that all-important need to spread risk out. Fortunately, that dip has also exposed some discounted dividend stocks to consider buying.
Best of all, some of those discounted dividend stocks can be bought for under $70 right now. Here’s a look at a trio of dividend-paying options to consider for your portfolio.
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Big bank. Big discount
It would be nearly impossible to mention a list of discounted dividend stocks and not mention at least one of Canada’s big banks. And that bank to consider right now is Canadian Imperial Bank of Commerce (TSX: CM).
CIBC is not the largest of Canada’s big banks. In fact, CIBC has the smallest international portfolio when compared to its larger peers. As a result, the bank has an added emphasis on its domestic arm, which includes mortgages.
And mortgage rates have soared alongside interest rates this year. This has added an element of risk to CIBC, resulting in the stock dipping a whopping 22% over the trailing 12-month period.
That’s also led to CIBC’s dividend swelling to a juicy 6.07%, handily making it a must-have discounted dividend stock. And that’s not even factoring in three other key points.
First, Canada’s big banks have fared significantly better than their U.S. peers during market pullbacks. In other words, buy CIBC now at a discount and hold it for the longer-term recovery, which will come.
Second, CIBC has an established history alongside its peers for providing juicy annual bumps to that dividend. So, prospective investors with long-term timelines should buy now and hold.
Finally, CIBC underwent a stock split last year, which has effectively lowered the cost of entry for new investors, making it a great time for long-term investors to buy this $56 stock.
Have you considered a defensive stock that’s on sale right now?
Telecoms are some of the most defensive stocks on the market. There’s a good reason for that view. Telecoms provide an increasingly necessary service, which has only increased in importance since the pandemic started.
Additionally, there are few would-be competitors at a national scale to compete with. The big telecoms control almost the entire market in Canada, and that control translates into a near stable and recurring revenue stream.
Finally, the above conditions allow telecoms to pay out a handsome dividend to investors. But what telecom should investors consider right now?
That would be BCE (TSX: BCE). BCE is one of the largest telecoms in Canada. In addition to providing its core subscription-based services, BCE also boasts a massive media segment.
The stable revenue stream from its core and media businesses also allows BCE to provide investors with a juicy dividend. In fact, BCE has provided a dividend to investors for well over a century without fail.
Today, that dividend works out to an appetizing 5.98%. And, like CIBC, BCE has an established history of providing annual bumps to that dividend that extends back well over a decade.
Prospective investors should also note that BCE is one of the discounted dividend stocks to buy right now. The stock is down nearly 10% over the trailing 12-month period, trading at just over $64.
Renewable energy can help you retire comfortably
Another intriguing option to consider is TransAlta Renewables (TSX: RNW). TransAlta is a renewable energy company, with a portfolio of over 40 facilities located across Canada, the U.S., and Australia.
TransAlta’s facilities are also diversified across several energy types, including solar, wind, hydro, and gas.
But what makes TransAlta really shine as one of the discounted dividend stocks to buy is its stable business model and juicy 7.59% yield.
TransAlta’s facilities are backed by regulated long-term contracts that span decades. In short, TransAlta generates a stable and recurring revenue stream for as long as it continues to generate energy.
And that stable revenue stream allows it to pay out that juicy dividend on a monthly cadence.
If that’s not enough, prospective investors should note that TransAlta’s place as one of the discounted dividend stocks to buy is due to a whopping 30% decline over the trialing 12-month period.
As of the time of writing, TransAlta trades at just over $12.
