Dividend stocks are a great investment for long-term investors who could use a nice passive-income boost. Undoubtedly, it can be a tough task to get any sort of raise from your work, even as inflation drives up the cost of living to borderline absurd levels. In any case, you can put your money to work for you, with income that flows in on a frequent (typically quarterly) basis.
Indeed, picture getting a nice dividend cheque in the mail. Though that’s no longer how dividends are paid (everything’s digital), I think it’s a great feeling to have just a bit of income (especially ever-increasing income from dividend raises) coming in on a passive basis.
With rates likely peaking out, I believe today’s slate of high-yield dividend stocks is way too cheap right now. Sure, growth is “in” again, as investors push hard to get back into their favourite tech-driven growth plays. And though your average 4% yielder is likely far less innovative and growthy than a firm that doesn’t pay a dividend, I think the former could outperform the latter on the front of returns.
Great dividends in Canada are begging to be bought and held
Here in Canada, income investors have been spoiled with somewhat larger dividends, at least compared to many U.S. stocks. Though U.S. firms may be growthier, I’m sure the appetite for buybacks also plays a big role in why Canada’s dividend payers tend to be slightly more generous on average.
Just have a look at the Canadian banks. They’re rich with yield right now. And I think they could offer gains in combination with their juicy payouts over the next five years, even with such a hazy macro climate.
Without further ado, here are two intriguing bank stocks to get great dividends after recently slumping in 2024:
Scotiabank
As a passive-income investor, how could you not be intrigued by Scotiabank (TSX:BNS) and its massive 6.76% dividend yield? The stock is off to a slow start for 2024, down just shy of 1%, while the rest of the bank stocks feel the full force of the industry headwinds.
I think a large reason why Scotiabank stands to be less rattled than the peer group is due to the damage that’s already in the books. The stock is already down over 25% from its all-time high, even when considering the strong finish to last year.
At $62 and change, I view Scotiabank as a deep value play in the banking scene that many may be discounting and overlooking. At 10.88 times trailing price to earnings, the internationally diversified Canadian bank looks to be one of the most interesting high-yield dividend plays to kick off the new year.
TD Bank
Speaking of slow starts to the year, we have TD Bank (TSX:TD), which is actually down more than 6% year to date. It’s only been two weeks of trading, but the stock has found a way to gravitate lower. Indeed, of late, TD has underperformed the peer group.
However, I believe shares are still worth picking up while the yield is over 5%. TD isn’t just another run-of-the-mill bank. In fact, I still view it as one of the best-managed and perhaps most innovative financials in Canada.
Recently, the firm received two notable 2024 Business Intelligence Group (BIG) Innovation Awards. It’s the third time it got recognition from BIG. As it continues digitizing, I believe more awards will be in the cards in the future.
