BlackBerry (TSX:BB) now trades lower than the bottom it hit during the pandemic crash. Investors who are searching for undervalued stocks for contrarian bets should instead consider a number of high-yield TSX dividend-growth names that pay you well to ride out turbulence and offer good upside potential on a rebound.
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Enbridge
Enbridge (TSX:ENB) trades near $48 per share at the time of writing compared to $59 at the high point in 2022. The stock is off the 2023 low, around $43, but it still looks cheap.
Enbridge expects to close a US$14 billion deal to buy three American natural gas utilities in 2024. The company is also working on a $25 billion capital program to drive growth. As a result, revenue and cash flow should expand in the next few years to support the dividend.
Enbridge raised the distribution by 3.1% for 2024 and has increased the payout for 29 consecutive years. Investors who buy the stock at the current level can get a 7.6% dividend yield.
Bank of Nova Scotia
Bank of Nova Scotia trades near $62 at the time of writing compared to $93 two years ago. The drop has largely been caused by investor concerns that aggressive interest rate hikes by the Bank of Canada and the U.S. Federal Reserve will ultimately cause a deep recession and trigger a wave of bankruptcies. For the moment, economists widely expect a soft landing.
Bank of Nova Scotia set aside more cash for potential loan losses in fiscal 2023 than it did in the previous year, and investors should expect the trend to continue in 2024 until interest rates begin to decline. Despite the headwinds, Bank of Nova Scotia remains a very profitable company and continues to increase the dividend.
The new chief executive officer reduced staff by 3% last year and is refocusing investment for growth in Canada, the United States, and Mexico. It will take some time to see the impact of the strategic shift, but investors get paid a solid 6.8% dividend yield right now while they wait.
Telus
Telus (TSX:T) has increased its dividend annually for more than 20 years. The company’s core mobile and internet subscription businesses are essential services for homes and firms. This means revenue and cash flow should be stable, even if the economy goes into a recession.
Telus trades near $24.40 at the time of writing compared to more than $34 at the high point in 2022. The drop looks overdone, considering Telus is expected to report consolidated revenue growth of nearly 10% for 2023 and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growth of around 7%.
At the time of writing, the stock provides an annualized dividend yield of 6.1%.
The bottom line on top TSX dividend stocks
Enbridge, Bank of Nova Scotia, and Telus pay attractive dividends that should continue to grow. If you have a contrarian investing style and are looking for opportunities for 2024, these stocks deserve to be on your radar.
