It’s no secret that many Canadian stocks have fallen in value as the uncertainty about the economy has increased recently. That makes sense with higher growth stocks that have more risk or stocks that have been struggling to perform well lately. However, even many high-quality dividend stocks have fallen from their highs, creating an excellent opportunity to buy these stocks on the dip.
With so many stocks to choose from now, though, it’s essential to find the highest quality stocks first, and then look to see if you can buy them at a discount. That’s a far better and safer strategy than simply trying to buy the cheapest stocks on the market.
When you buy a stock that’s cheap, you can make a significant return as it rallies back to fair value. But when you buy a high-quality stock that can consistently earn you impressive returns for many years to come, there is far more potential for major gains.
And with high-quality dividend stocks, the potential is even greater, especially if you can find ones trading at a discount. Buying undervalued dividend stocks not only offers you more capital gains potential, it also allows you to lock in a higher dividend yield.
So with that in mind, if you’re looking for rock-solid dividend stocks to buy now, here are two top picks to consider today.
Both stocks have defensive business models, earn mounds of cash flow, are Canadian dividend aristocrats, and trade roughly 20% off their 52-week highs.
A top real estate stock offering growing passive income
If you’re looking to boost your passive income, one of the best dividend stocks to buy while it’s undervalued is CT REIT (TSX:CRT.UN).
CT REIT is a retail REIT with Canadian Tire as both its majority owner and largest tenant. In fact, Canadian Tire is responsible for roughly 90% of its revenue.
Therefore, given what a well-known brand Canadian Tire is and the fact that it continues to grow and operate well, CT REIT is a highly reliable investment.
Many retail REITs struggled through the pandemic. Meanwhile, CT REIT not only weathered the storm well, but it actually managed to grow its revenue through the pandemic. In fact, since going public, CT REIT hasn’t had a single year in which its revenue didn’t increase.
And because the stock is consistently earning tonnes of cash flow and expanding its operations, it’s no surprise that it’s constantly increasing its monthly dividend every single year.
Plus, with CT REIT trading near the bottom of its 52-week range, not only can you buy it at a discount, but the stock offers investors an impressive dividend yield of roughly 6.2% today.
Therefore, if you’re looking for a rock-solid dividend stock to buy now and boost your passive income, CT REIT is certainly one of the best to consider.
One of the best dividend aristocrat stocks to buy now
Another high-quality dividend stock to buy while it trades off its highs is BCE (TSX:BCE), the massive telecommunications company.
Telecommunications is an industry that’s highly defensive. Furthermore, it’s an industry that generates plenty of free cash flow, so no wonder why BCE is another Canadian dividend aristocrat like CT REIT.
The stock’s wireless and wireline operations are generating it billions in cash flow each year, much of which it pays back to investors. In fact, BCE offers investors a yield of roughly 6.5% today and has increased its dividend for 14 straight years now.
Furthermore, in addition to returning capital to investors each quarter, BCE is also investing in growth, building out its fibre-to-the-home and 5G infrastructure, which offers years of growth potential for the $54 billion stock.
Therefore, if you’re looking for a reliable dividend stock to buy now, BCE is certainly one of the top investments that Canadians can make today.
