3 TSX Stocks With Unbeatable Passive Income and Bargain Prices

Three TSX stocks trading at bargain prices are buying opportunities for their relatively safe and sustainable dividend payments.

| More on:
stock research, analyze data

Image source: Getty Images

Yield-hungry but price-conscious investors can buy any of the three TSX stocks trading at depressed or bargain prices. Two are Canadian Dividend Aristocrats, while one provides vital oil waste treatment and disposal services. Their generous dividends are relatively safe, ensuring unbeatable passive income.

Cogeco Communications (TSX:CCA), Magna International (TSX:MG), and Secure Energy Services (TSX:SES) are good prospects for their revenue growth and positive business outlook. Investors can take positions before the next bull market.

Dividend Aristocrat #1

Cogeco is down 11.63% year to date ($66.27 per share), although the juicy 4.72% dividend compensates for the underperformance. The $2.94 billion diversified holdings corporation is North America’s eighth-largest hybrid fibre coaxial cable operator. Apart from 19 consecutive years of dividend hikes, the annual increase over the last nine years is 10%. Also, for fiscal 2023, the payout ratio is only 24%.

In the first half of fiscal 2023 (six months that ended February 28, 2023), revenue increased 1.2% year over year to $757.2 million. However, profit declined 4.8% to $226.4 million versus the same period in fiscal 2022. Cogeco aims to become a competitive force in the region’s telecom sector.

Its two broadband services (Cogeco Connexion in Canada and Breezeline in the U.S.) and Cogeco Media are revenue and cash flow sources. This year, management will vigorously pursue its ambitious market expansion strategy, including collaborating with governments to bridge the digital divide. Moreover, capturing acquisition opportunities is ongoing.

Dividend Aristocrat #2

Magna International’s year-to-date loss is only 4.71%, but the current share price of $71.25 is 22% lower than its 52-week high of $91.74. If you invest today, the dividend yield is 3.48%. This $20.38 billion auto parts company is a Dividend Aristocrat due to its dividend-growth streak of 13 years. Market analysts’ 12-month price target is between $87.33 (+22.6%) and $110.68 (+55.3%).

In the first quarter (Q1) of 2023, sales rose 10.7% to US$10.67 billion versus Q1 2022, while net income declined 42.7% year over year to US$217 million. The global automotive supplier boasts complete vehicle engineering and contract manufacturing expertise, although light vehicle production and assembly volumes could impact sales.

Management is confident that cars and other light vehicle production in North America and Europe will increase in 2023, as supply-chain constraints ease. Its profit forecast this year ranges from US$1.3 billion to US$1.5 billion compared to US$641 in 2022.

Enduring business

Secure Energy Services is a screaming buy after reporting a record profit in Q1 2023. In the three months that ended March 31, 2023, revenue and net income climbed 9% and 45% to $1.9 billion and $55 million versus Q1 2022. As of this writing, the share price is $6.91, a year-to-date loss of 10.51%. However, investors partake in the 6.45% dividend.

The business of this $1.84 billion energy services company is vital and enduring. Secure Energy provides Environmental waste management services, energy transportation blending solutions, and heavy equipment contracting and drilling enhancement solutions.

Its chief executive officer Rene Amirault said the growth opportunities supported by strong commercial agreements should provide long-term reliable cash flows. It should also enable SES to maintain a solid financial position.

Earn two ways

Cogeco Communications, Magna International, and Secure Energy Services are buying opportunities before the next bull market. Investors can earn in two ways: dividends and price appreciation.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Cogeco Communications and Magna International. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Canadian Dollars
Dividend Stocks

The Best TSX Stocks to Invest $5,000 in October 2023

The bearish market momentum of October 2023 has created a ripe time to buy three TSX stocks that can outperform…

Read more »

Increasing yield
Dividend Stocks

2 TSX Dividend Stocks With Lucrative Yields in October 2023

These stocks pay great dividends that should continue to grow.

Read more »

Gold medal
Dividend Stocks

Canadian Blue-Chip Stocks: The Best of the Best for October 2023

These TSX giants deserve to be on your radar.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Earn $50 a Week With These 3 Stocks

The right dividend stocks offer more than just a high yield. They offer sustainability and growth, so you can rely…

Read more »

oil and gas pipeline
Dividend Stocks

Where Will Enbridge Stock Be in 10 Years?

I wouldn’t be surprised if ENB stock even doubles in value in the next 10 years. Here why.

Read more »

protect, safe, trust
Dividend Stocks

3 Growth Stocks Safe Enough to Hold for a Decade (or More)

Safe growth stocks that can be held for a decade (or more) may offer steady, predictable returns, making them reliable…

Read more »

sale discount best price
Dividend Stocks

These 2 Discounted Stocks Are Ready for a Comeback

Partial recoveries are quite common, but true comebacks (full recovery) are relatively rare, which makes identifying them harder than identifying…

Read more »

Woman has an idea
Dividend Stocks

Where to Invest $10,000 in October 2023

Its crucial to diversify your investments and reduce portfolio risk while investing amid a challenging macro economic backdrop.

Read more »