Various Canadian dividend stocks remain quite cheap, even given their recent rallies off last year’s lows. Indeed, lower interest rates could act as a drag on dividend yields over coming quarters. As the weight of rates is taken (gradually) off the shoulders of capital-intensive firms with large dividend commitments, they may be in a spot to appreciate, perhaps sparking the next leg of their recent relief runs off their lows.
In this piece, we’ll have a look at two low-cost dividend stocks that seem to be taking some sort of breather after their recent 2023 year-end jumps. Though only time will tell what will propel them higher over the coming months, I do view them as trading at attractive multiples. And if you want to give yourself a raise, the following plays seem suited to do the job!
While there are risks to the following firm’s growth stories, I’d argue that long-term thinkers with confidence in their growth strategies need not hesitate as the macro headwinds begin to cause shares to fluctuate a bit, perhaps causing some of the dividend plays to retest their 52-week lows.
Without further ado, here are dividend stocks I’d like to buy while they’re trading at discounted multiples.
Enbridge
It’s been quite a nasty start to 2024 for Enbridge (TSX:ENB), with shares down around 4% year to date, as the broader TSX Index rose around 2%. Indeed, I don’t expect the underperformance to last as the management team does everything in their power to keep its dividend on as solid a footing as possible.
Recently, the firm remarked on the Mainline oil pipeline, going as far as to say it could face a tailwind as the Trans Mountain pipeline is delayed. Undoubtedly, Enbridge still stands out as one of the best midstream operators out there. And the 8% dividend yield, I believe, isn’t just a trap for the lovers of passive income out there.
Enbridge’s dividend looks safe despite being swollen. As rates fall and the firm looks to continue generating ample cash flows, expect to be rewarded richly for your patience with the name at the core of your portfolio. Between ENB shares and bonds, the former shines way brighter, at least in my opinion. At 16.4 times trailing price-to-earnings, ENB looks like one of the most bountiful deep-value options on the TSX Index today.
Telus
Telus (TSX:T) is another cheap dividend stock that has an impressive yield (6.35% right now). Like Enbridge, shares have been under some pressure of late. But after the beating it took in 2022 and 2023, my guess is that the trajectory from here is upward despite the industry pressures which have hit the whole group.
The company clocked in solid Q4 numbers, with profits rising 17%. The wireless business is growing, and the firm may just be able to grab some market share from rivals if it plays its cards right. Either way, the $35.3 billion telecom looks poised for success, especially in a climate in which expectations are muted, to say the least.
