Canadian investors have faced the challenge of a volatile market, as the domestic economic climate has worsened in the face of high interest rates and a disgruntled consumer base. The telecommunications and utilities sectors have historically been highly dependable for long-term investors, particularly over the course of the 2010s. However, both the S&P/TSX Capped Communication Services Index and the S&P/TSX Capped Utilities Index have suffered declines in the year-over-year period as of close on Friday, September 22. Despite that, today, I want to zero in on two super-cheap stocks that are in the telecom and utility sectors. Let’s dive in!
Here’s why BCE is a cheap stock that you can depend on for the long haul
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. Shares of this cheap stock managed to gain some momentum in late August, but BCE stock has steadily declined over the course of September 2023. It has sunk to new 52-week lows over the past week.
This company unveiled its second-quarter (Q2) fiscal 2023 earnings on August 3. BCE reported 241,516 total wireless mobile phone and mobile-connected devices, retail internet, and IPTV net activations. That was up 76.5% compared to the prior year. Moreover, BCE achieved consolidated revenue growth of 3.5% and adjusted EBITDA growth of 2.1%. It achieved the best Q2 retail activations since 2007, in addition to higher residential Internet revenue growth.
A Canadian Dividend Aristocrat is a stock that has delivered at least five consecutive years of increases to its dividend. BCE has qualified as a Dividend Aristocrat many times over. It currently offers a quarterly dividend of $0.968 per share. That represents a superb 7.5% yield.
This cheap stock is also royalty among long-term investors
Canadian Utilities (TSX: CU) is the second cheap stock I’d suggest for long-term investors right now. This Calgary-based company is engaged in the electricity, natural gas, and retail energy businesses in the United States, Australia, and around the world. Like BCE, Canadian Utilities has also been battered in the month of September.
In Q2 2023, Canadian Utilities reported adjusted earnings of $100 million — down from $136 million in the previous year. Meanwhile, it posted adjusted earnings of $317 million in the first half of fiscal 2023 compared to $355 million in the first two quarters of fiscal 2022. This company has run into turbulence in a choppy economic environment. However, long-term investors should feel good about owning what is now dividend royalty.
A Dividend King is a stock that has achieved at least 50 consecutive years of dividend growth. Some of the most recognizable companies on the planet have reached this milestone in the United States, including household names like Coca-Cola, Procter & Gamble, and Walmart. Canadian Utilities became the first TSX stock to wear the crown this decade. It has delivered 51 straight years of dividend growth.
Relative Strength Index (RSI) is a technical indicator that measures the price momentum of a given security. Both BCE and Canadian Utilities have plunged into technically oversold territory, with RSIs below 30 in late September. This cheap stock currently offers a quarterly dividend of $0.449 per share, which represents a tasty 6.1% yield.
