The S&P/TSX Composite Index climbed 206 points on Thursday, July 13. Some of the top sectors on the TSX included information technology, base metals, battery metals, and financials. Despite the recent bump, Canadian stocks have broadly struggled in the early summer season.
Today, I want to target three very cheap dividend stocks that I’m looking to buy as we approach the middle of July 2023. Let’s jump in.
This cheap dividend stock is the only Dividend King on the Canadian market
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 around the world. Shares of this dividend stock have dipped 2.1% month over month as of close on July 13. The stock is now down 7.8% so far in 2023.
Investors can expect to see this top utility’s second-quarter (Q2) fiscal 2023 earnings later this July. The company unveiled its Q1 fiscal 2023 results on April 27. Canadian Utilities reported adjusted earnings of $217 million in Q1 2023 — down marginally from $219 million in Q1 fiscal 2022. Like its peers, Canadian Utilities has committed to an aggressive capital expenditure plan that is designed to grow its rate base. On January 3, the company also closed its acquisition of promising wind assets that will bolster its renewable energy portfolio.
A Dividend King is a stock that has achieved at least 50 consecutive years of dividend growth. Canadian Utilities has now hiked its dividend for 51 straight years. This is the first TSX stock to reach that milestone. It offers a quarterly distribution of $0.449 per share. That represents a strong 5.2% yield. Meanwhile, this dividend stock possesses a favourable price-to-earnings (P/E) ratio of 14.
Why this top telecom stock belongs in your portfolio in July and beyond
BCE (TSX:BCE) is the second undervalued dividend stock I’d like to snatch up in July. This Montreal-based communications company provides wireless, wireline, internet, and television (TV) services to residential, business, and wholesale customers in Canada. Its shares have dropped 2.1% over the past month. That has pushed the stock into negative territory in the year-to-date period.
In Q1 fiscal 2023, BCE delivered consolidated revenue growth of 3.5% to $6.05 billion. Meanwhile, adjusted net earnings dipped 4.8% to $772 million. Adjusted earnings per share dropped 4.5% to $0.85. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. BCE posted a decline in adjusted EBITDA of 1.8% to $2.53 billion.
Shares of this dividend stock currently possess a rock-solid P/E ratio of 21. BCE offers a quarterly distribution of $0.968 per share, which represents a tasty 6.5% yield.
Here’s a cheap dividend stock that offers a super yield
Capital Power (TSX:CPX) is the third and final cheap dividend stock I’d look to snatch up in the middle of July. This Edmonton-based company is engaged in the development, acquisition, ownership, and operation of renewable and thermal power-generation facilities in Canada and the United States.
In Q1 2023, Capital Power reported revenue and other income of $1.26 billion — up from $501 million in Q1 fiscal 2022. Moreover, adjusted EBITDA increased to $401 million compared to $348 million in the prior year. This dividend stock possesses an attractive P/E ratio of 18. Moreover, Capital Power offers a quarterly distribution of $0.58 per share, representing a very strong 6% yield.