The TSX Index has been trending lower in the past month after staging a stellar comeback in the first half of 2023. In the last 20 trading days, the TSX Index has fallen over 3.5%, and the decline for several companies has been even more exaggerated as investors are worried about several macroeconomic factors negatively impacting financials across sectors.
But the pullback may also provide a buying opportunity for bargain hunters as quality stocks are available at a discount. Moreover, the dividend yields of companies have moved higher, making them attractive to value and income-seeking investors.
Here are three high-yield dividend stocks available at a cheap multiple today.
Algonquin Power & Utilities stock
Down 57% from all-time highs, Algonquin Power & Utilities (TSX: AQN) offers shareholders a dividend yield of 6%. The company provides cost-effective rate-regulated natural gas, water, and electricity generation, transmission, and distribution utility services to over 1 million customer connections in North America.
Due to its high debt levels, AQN already rolled back its dividends by 40% in early 2023, boosting its liquidity in the process. The utility company has shored up its financials by selling its non-core assets and reducing balance sheet debt.
Priced at 12.9 times forward earnings, AQN stock is quite cheap and trades at a discount of 30% to consensus price target estimates. After accounting for its dividends, total returns may be closer to 36% in the next 12 months.
TransAlta Renewables stock
A clean energy company, TransAlta Renewables (TSX: RNW) pays shareholders a monthly dividend of $0.078 per share, indicating a yield of over 7%. The TSX entity continues to invest in highly contracted renewable and natural gas power generation facilities and other infrastructure assets. These long-term contracts with investment-grade counterparties allow RNW to benefit from a steady stream of cash flows.
TransAlta Renewables will soon merge with TransAlta Corp., making the combined company one of Canada’s largest independent power producers, arming it with greater liquidity and a tasty dividend.
The acquisition will be closed by the end of 2023, subject to regulatory approvals.
Slate Grocery REIT
One of the most popular real estate investment trusts in Canada, Slate Grocery (TSX: SGR.UN) should be on your shopping list today. A grocery-anchored REIT, Slate Grocery is fairly recession-resistant and offers you a dividend yield of 9.1%.
In Q2 2023, the company achieved a record 1 million square feet of total leasing at attractive spreads driving occupancy rates and revenue growth. The new deals were completed at 23.7% above comparable average in-place rents. Further, non-option renewals were completed at 10.9% above expiring rents, showcasing the resiliency of its business model.
Slate Grocery’s new leasing efforts increased occupancy rates by 70 basis points in Q2 compared to Q4 2022. It ended the June quarter with an occupancy rate of 93.9%, allowing same-property net operating income to increase 2.7% year over year.
To offset higher interest rates, Slate Grocery strengthened its balance sheet and enhanced its liquidity position. The company’s fixed debt allows Slate Grocery to generate stable cash flows and sustain its current dividend yield.
Priced at 12 times forward earnings, Slate Grocery stock trades at a discount of 22% to consensus price target estimates.
