Retirement readiness has certainly been rocked by the last few years of market volatility. As markets look to shrug off a challenging past couple of years, I’d look to the neglected value stocks to take charge. Tax-Free Savings Account (TFSA) investors may wish to consider them to be retirement ready in the next 10-20 years or so.
Remember, market corrections and pullbacks will always happen, likely when the crowd least expects it. Conversely, when everyone sees a recession, the market may not respond with a catastrophic implosion. Indeed, there is still money to be made in recessions provided you position yourself prudently.
Let’s have a look at three dividend stocks that I think could form a solid core for any retirement-focused TFSA portfolio.
BCE
BCE (TSX: BCE) is a dividend stock that sports a 6.54% yield. Shares have fallen below $60 per share again and could be a worthy option for investors looking to invest in the future of 5G wireless at a reasonable valuation.
At 21.17 times trailing price to earnings (18.4 times forward), BCE stock looks fairly priced. Still, the swollen dividend could help you build wealth over the years, even if the stock is destined to spend most of the next few years in that low $60 range. For this reason, BCE stock is a worthy addition to any TFSA portfolio that needs a bit of a volatility dampener.
Recently, BCE slashed 1,300 jobs as part of a reorganization. As the media division gets revamped, I’d look for the firm to put cost savings toward growth initiatives (think wireless infrastructure), while continuing to reward shareholders with dividend raises.
Quebecor
Quebecor (TSX: QBR.B) goes for $31 and change per share after its latest 10% correction off two-year highs. Undoubtedly, Quebecor may become the telecom that brings the fight to Canada’s Big Three telecom incumbents. The company will need to spend money to grow its presence, and in a high-rate world, it may be tough to expand rapidly.
As rates fall over the longer term, though, I think Quebecor is a worthy telecom addition to any TFSA portfolio. The stock trades at 12.32 times trailing price to earnings, with a nice 3.77% dividend yield. The latest correction in the shares seems mostly unwarranted. Shares were already quite cheap relative to the pack! They’ve only since become cheaper.
National Bank of Canada
National Bank of Canada (TSX: NA) stock has steadily outperformed its Canadian banking rivals over the last five years. The surprising and impressive run was driven by management prudence and navigation through turbulent conditions (think the pandemic). With a 10.4 times trailing price-to-earnings multiple and a 4.2% dividend yield, NA stock stands out as a great value for investors looking for the perfect mix of gains and income.
Following the National Bank’s latest quarterly beat, it increased its dividend, just like its Big Six banking peers. Moving ahead, I’d look for National Bank to stay resilient, as Canada falls into recession territory.
Bottom line
National Bank of Canada is my favourite dividend idea from the batch. It’s shown it’s capable of keeping up with its much larger brothers. As the economy normalizes, I’d look for NA stock to move higher from current levels.
