The TSX today still trades down 10% compared to 52-week highs, which still puts us firmly in a bear market. Because of this, investors are shaky. Any stocks that even hint of catastrophe leads to a drop in share price again and again, putting even strong dividend stocks in oversold territory.
Yet that leaves a great opportunity for investors seeking out long-term dividend stocks. That is why today, I’m going to look at these dividend stocks that offer a substantial opportunity for when they bounce back.
First up we have TELUS (TSX:T), with shares that are down about 19% in the last year though just about 2% year to date. The issue here has been lower first-quarter profits coupled with the ongoing drama that is a merger between Rogers and Shaw.
Yet if you think this should push you out of the telecom sector, especially in terms of Telus stock, think again. While there were lower profits, analysts still recommend at least sticking it out if you have the stock and watching these companies for when valuations hit value territory.
For now, Telus stock trades in oversold territory at 27.16 on the Relative Strength Index (RSI). It offers a dividend yield at 5.67% as of writing, and a potential upside of 24% to hit past 52-week highs. So, when this stock eventually rallies, I wouldn’t wait long to pick it up.
Another top choice among oversold dividend stocks is Nutrien (TSX:NTR), and, honestly, it’s for similar reasons. Nutrien stock is down 37% in the last year and 25% year to date. Much of this drop comes from again lower-than-expected earnings. However, Nutrien stock also warned that the potash market may not be as great as they once anticipated.
Investors were then quick to shed the stock, leaving an opportunity for the patient investor. Among dividend stocks it’s still a strong player, offering a yield at 3.95%. That’s far above the normal range we’ve seen in the last year. What’s more, it’s one of the largest crop nutrient companies in the world, and, with less arable land, it certainly has room to grow.
Nutrien stock now trades at 30.56 RSI as of writing and 4.16 times earnings. So, it’s well within value territory for those seeking a deal. If it reaches 52-week highs, that would give investors potential upside of 78% as of writing!
Pet Valu Holdings
Finally, we have Pet Valu Holdings (TSX:PET), which, again, offers a great opportunity for those willing to wait just a little bit. Pets are a part of life, and the company will remain, at the very least, stable while Canadians continue to pay for the essentials.
However, earnings recently fell short of estimates, with a lower profit coming in similarly to other companies. This could soon change however, as Pet Valu stock looks to open up 50 new stores across Canada.
Meanwhile, it’s one of the dividend stocks offering a yield at 1.3% as of writing, with shares down 3% in the last year but 21% year to date after earnings. As for value, it trades at a 26.68 RSI, and a potential upside of 39% to reach 52-week highs. So, again, I would hop on a dividend stock like this while it remains in oversold territory. It won’t be for long.