3 TSX Dividend Stocks on Sale Heading Into July 2023

Canadians should be on the hunt for discounted TSX dividend stocks like BCE Inc. (TSX:BCE) and others in the summer season.

Ambrose O'Callaghan

Ambrose O'Callaghan graduated with a BA in Political Science from McMaster University. After that, he jumped into the banking world. He worked from the front line to an investment associate role. After that, he found a way to marry his experience and knowledge in the world of banking and finance to his love and passion for writing. Ambrose is a passionate believer in Warren Buffett's value investing model.

Published June 30, 2023 4:45 pm EDT

The S&P/TSX Composite Index climbed 94 points on Thursday, June 29. Some of the top-performing sectors included health care, energy, and financials. Despite the positive day, there are still many equities on the TSX that are discounted after a turbulent period for the Canadian market. Today, I want to zero in on three TSX dividend stocks that are on sale as we move into July 2023. Let’s jump in.

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Here’s an undervalued TSX dividend stock that offers monthly income

TransAlta Renewables (TSX: RNW) is a Calgary-based company that owns, develops, and operates renewable and natural gas power-generation facilities and other infrastructure assets in Canada, the United States, and Australia. Shares of this TSX dividend stock have plunged 11% month over month as of close on June 29. That has pushed the stock into negative territory so far in 2023.

This company released its first quarter fiscal 2023 earnings on May 5. In the first quarter of fiscal 2023, TransAlta Renewables reported total revenues of $119 million — down from $143 million in the previous year. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA fell to $128 million compared to $139 million in the prior year.

Shares of this dividend stock are trading in favourable value territory compared to its industry peers. The Relative Strength Index (RSI) is a technical indicator that measures the price momentum of a given security. This stock last had an RSI of 32, putting it just outside technically oversold territory. TransAlta offers a monthly dividend of $0.078 per share. That represents a monster 8.4% yield.

This top TSX dividend stock looks discounted in late June 2023

BCE (TSX: BCE) is a Montreal-based communications company that provides wireless, wireline, internet, and television (TV) services to residential, business, and wholesale customers in Canada. This top telecom stock has dipped 2.3% over the past month. Its shares have now dropped marginally in the year-to-date period. Investors can see more of its recent performance with the interactive price chart below.

In the first quarter of fiscal 2023, BCE delivered operating revenue growth of 3.5% to $6.05 billion. Meanwhile, adjusted EBITDA dipped 1.8% to $2.53 billion. Earnings were weighed down by higher operating costs, inflationary cost pressures, and higher television programming costs.

This TSX dividend stock last had a solid price-to-earnings ratio of 21. BCE offers a quarterly dividend of $0.968 per share, which represents a tasty 6.4% yield.

A Dividend King that looks undervalued right now

Canadian Utilities (TSX: CU) is a Calgary-based company that is engaged in the electricity, natural gas, and retail energy businesses in the United States, Australia, and worldwide. Its shares have dropped 5.4% month over month as of close on June 29. The stock is now down 6.7% so far in 2023.

In the first quarter of 2023, Canadian Utilities reported adjusted earnings of $217 million — down from $219 million in the previous year. A Dividend King is a stock that has achieved at least 50 straight years of dividend growth. Canadian Utilities has delivered dividend growth for 51 consecutive years. This Dividend King offers a quarterly distribution of $0.449 per share, representing a strong 5.2% yield.