This 1 Dividend Stock Is a Bargain Hiding in Plain Sight

BCE (TSX:BCE) stock is under pressure, but its dividend looks so tempting.

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Dividend investing may have gone out of favour, with growth and momentum investing right back in the driver’s seat, and rates poised to head lower from here. Undoubtedly, dividend stocks are best held over extremely long periods of time. Though they won’t give you a quick gain overnight, they can offer a degree of stability and even some dividend raises over time. Indeed, lower rates may be a driving force back to high-multiple tech plays.

However, low rates can also stand to benefit a good number of dividend plays. In this piece, we’re going bargain-hunting in the depths of the TSX Index. So, if you consider yourself a new value investor or a seeker of massive passive income, the following plays, I believe, are worth careful consideration as the TSX Index begins to pick up steam going into the spring months.

As always, put in your own due diligence before even thinking about hitting the buy button. Also, don’t expect shares to turn higher immediately after you’re bought in. The market doesn’t care when you pick up shares. At the end of the day, Mr. Market will continue to move mysteriously. The only thing that you can expect with the following TSX dividend stocks are the juicy dividend payments, which still look safe and well-covered by free cash flows.

Without further ado, consider shares of BCE (TSX:BCE) as they look to backtrack toward 52-week and, perhaps eventually, multi-year lows.

BCE

BCE is a Canadian telecom firm that’s fallen under more pressure over the past few sessions following its shocking wave of mass layoffs sweeping through the company. Around 4,800 jobs were slashed, as BCE took its cost cuts to the next level. It’s a horrific situation, and Prime Minister Justin Trudeau is no fan of the move. Things look quite bleak for the $46.1 billion telecom titan right now, as shares look to flirt with $50 levels again. With a 7.81% dividend yield that’s not at risk of a reduction, income investors can expect some generous dividend payments as they wait for the tumbling stock to bottom out.

Should BCE stock retreat considerably below $50 (and 52-week lows), there’s no telling how long the name can go, as it looks to retreat below the lows hit all the way back in March of 2020 during the days of the COVID stock market crash. It won’t be easy for the telecom behemoth to get back on the right track as the negative news continues piling up. But sometimes, as a contrarian, you’ve got to hold your nose and hit the buy button, especially as most others look to throw in the towel.

In terms of catalysts, they seem few and far between, making BCE stock a rather untimely play if you’re on the hunt for bounce-back gains. Further out, lower interest rates and more newcomers to Canada looking to sign up for wireless data plans could help sustain a rally down the road. But it’s sure to be a windy road and one that could churn the stomachs of shareholders.

The Foolish bottom line on BCE

In short, there’s not much to pound the table over at BCE, unless you’re a value investor with an appetite for dividends. Personally, I think the stock has gotten too cheap after the recent wave of criticisms and less-than-promising headlines. Though a bottom could still be far off (the stock has lost almost a third of its value already), the dividend is one of the primary reasons to prefer BCE over most other fallen dividend plays.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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