It’s been a horrific September thus far, with the broader TSX Index now down around 6% since mid-September. Undoubtedly, September was always one of the worst months for the stock market. And though the month is almost over, investors shouldn’t expect the choppy moves to halt anytime soon. Arguably, the recent dip in stocks is a good thing, given the impressive run off last year’s lows. The last thing a long-term investor wants is a market that just goes up only to implode at a later date.
As the seasons change, Canadian investors should give their watchlists another look, as there’s no shortage of insanely oversold stocks right now that may be trading at considerable discounts.
Without further ado, let’s have a closer look at two dividend heavyweights that may be worth grabbing right here, even if you believe that the market’s hangover will continue into December.
BCE (TSX:BCE) is under so much pressure right now that it’s quite absurd. The telecom titan is really feeling the pains of higher interest rates. Further, its media division is doing it no favours, as Canada’s economy looks to test a recession over the coming months. On Wednesday, shares of BCE sunk another 1%, bringing the stock to $51.51 per share. It’s hard to believe that such a blue-chip dividend darling could be down a grand total of 30% from its all-time highs. But that’s exactly where BCE stock stands today.
At 20.44 times trailing price to earnings, shares aren’t even that cheap. Undoubtedly, headwinds seem to be getting the better of the firm, as shares look to fall further below the lows not seen since the depths of 2020. It’s hard to catch the falling knife right here, unless you have a game plan to keep buying on the way down.
With a 7.43% dividend yield, I find it hard to take a raincheck while it’s at fresh multi-year lows. Are there issues? Definitely. However, I think management will be able to navigate the storm.
Speaking of telecom pressure, Verizon (NYSE:VZ) continues to be one of the biggest dividend laggards out there. On Wednesday, shares sunk nearly 2%, bringing the stock to fresh multi-year lows of $32 and change. Indeed, the slip saw shares surpass the 8% yield mark. With the stock having suffered a nearly 50% haircut, I think Canadian investors may wish to consider buying the dip if they seek next-level value.
Mad Money’s Jim Cramer thinks Verizon is dead money. Though a sustained turnaround may be far off, I already think most of the damage has already been done. Rates won’t stay high forever. And if they turn in a year’s time, VZ stock could be above $40 again.
As the yield swells further, investors could grow increasingly concerned about the safety of the dividend. Personally, I think the payout is safe, as improved free cash flows should help the firm improve its financial footing gradually over the coming years.
The Foolish bottom line
BCE and Verizon are hurting dividend titans in the telecom space right now. I think the damage is overdone, making them ripe for bargain hunters who are willing to go against the grain.