As the economic tides get rough, retirees should stick with the tried-and-tested dividend stocks that can make it through what could be another several quarters of extreme volatility and headwinds. Indeed, the following dividend knights are probably suitable candidates to stash atop your buy watchlist as we head into the holidays.
Just because a dividend could be left intact, though, does not mean there’s limited downside. Indeed, if a recession proves harsh, any stock, even the most defensive dividend payer, could be in for a rough-ish type of landing.
Though bottom-fishing in distressed stocks is never comfortable, I do think retirees with a long-term horizon should view the recent barrage of volatility as more of an opportunity and less of a sign that there’s risk all around us. In fact, the magnitude of risk tends to go lower as the stock price (and expectations) move lower.
In this piece, we’ll have a quick check-in on two dividend plays that I view as knights that have what it takes to weather a continuation of the storm in 2024. Without further ado, let’s consider Telus (TSX:T) and BCE (TSX:BCE), two yield-heavy dividend knights that I think offer deep value and massive yields which can allow retirees or other income investors to give themselves a nice raise.
Telus
Reaching for yield can be a risky move, but when it comes to Telus stock, I think income investors are getting a generational opportunity to get a steady dividend at an unreasonably low price! Indeed, you can’t fault Telus on its bearish descent off its 2022 highs. The telecom industry has been hurting. And until rates flatline or retreat, it may be tough for the growthy telecom to continue its march higher.
The stock plunged as low as $22 and change before rallying sharply, to around $24 per share. The yield now sits at 6.32%. Only time will tell if the bottom was put in a few weeks ago. Regardless, I think it’s hard to argue that things are overly negative when it comes to the former dividend darling.
It may be tough sledding going into the holidays, but if you’re enticed by the dividend and are willing to stick it out over the next three years at minimum, I find Telus stock to be one of the worthier dividend stocks in the market right now.
BCE
If you want even more yield, BCE stock looks even more enticing. At writing, the yield sits at 7.3% after a small bounce off its lows of around $50 and change per share. At around 21.8 times trailing price-to-earnings, the stock looks reasonably priced. As the company continues bringing costs into control, I do believe BCE could sustain a rally to much higher levels, even without help from the broader economy.
Things have gotten so bad for BCE that it may not take a whole lot to help the stock march higher from its multi-year depths. Like Telus, investors should have a long-term horizon and be prepared for more volatility as we head into the new year.
The telecom scene is wildly competitive, but BCE has what it takes to hold its own. At the end of the day, it’s a heavyweight champ in the telecom scene and a dividend knight, in my books!
