3 Overlooked High-Yielding Dividend Stocks to Buy Right Now

These three dividend stocks are excellent buys, given their discounted prices and high yields.

| More on:
Increasing yield

Image source: Getty Images

The Canadian equity markets are upbeat this year, with the S&P/TSX Composite Index rising 5.8%. Solid quarterly performances and an improving macro environment with easing inflation have increased investors’ confidence, driving the equity markets.

Despite strengthening broader equity markets, the following three dividend stocks still need to participate in the rally for various reasons. They are trading at substantial discounts from their 52-week highs, and their valuations look cheap, thus providing excellent buying opportunities.

Pizza Pizza Royalty

Pizza Pizza Royalty (TSX:PZA) owns and operates 743 Pizza Pizza and Pizza 73 brand restaurants. It has adopted a highly franchised business model, operating all its restaurants through franchisees. It collects royalty from its franchisees based on sales. So, its financials are immune to the rising expenses in this inflationary environment. Meanwhile, the company’s royalty pool income could increase amid increased menu prices due to rising costs.

Further, PZA focuses on launching new products and leveraging its marketing initiatives and technology to drive sales. From the beginning of this year, it has added 45 new restaurants to its royalty pool and removed 14 restaurants that ended their operations. It is constructing new restaurants and projects to increase its traditional restaurant count by 3-4% this year. Further, the company is continuing its renovation program, which could support its same-store sales growth.

Amid solid performance last year, PZA raised its monthly dividend three times. It currently pays a monthly dividend of $0.0775/share, with a forward yield of 6.73%. Also, it trades at an NTM (next 12-month) price-to-earnings multiple of 13.8, making it an attractive buy.


Second on my list is Telus (TSX:T), which has lost around 25% of its stock value compared to its 52-week high. Higher interest rates and an unfavourable announcement from the CTRC (Canadian Radio-television and Telecommunications Commission) have dragged the company’s stock price down.

In November, CTRC mandated large telcos to share their fibre-to-the-home (FTTH) networks with smaller players, so smaller players can continue to offer their services, thus increasing competition and lowering prices for customers. The announcement would disincentivize companies like Telus, which have invested aggressively in expanding their broadband services. The selloff has dragged its valuation down to attractive levels, with its NTM price-to-sales currently at 1.5.

Despite the near-term weakness, the long-term growth prospects of Telus look solid amid growing demand for telecommunication services due to digitization and remote working and learning. Also, the selloff has increased its dividend yield to 6.94%.

NorthWest Healthcare Properties REIT

Another cheap dividend stock you can buy right now is NorthWest Healthcare Properties REIT (TSX:NWH.UN), which owns and operates 219 income-producing healthcare properties with a total leasable area of 17.7 million square feet. Higher debt levels and increased interest expenses weighed on its financials, thus dragging its stock price down.

However, the healthcare real estate investment trust strengthened its balance sheet by divesting $450 million of assets last year, including non-core assets. It has also amended, extended, and refinanced its debt facilities and lowered its monthly dividend to improve its financial position.

  • We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Enbridge made the list!

Meanwhile, NWH continues to enjoy higher occupancy and collection rates, which stood at 97% and 99% in the December-ending quarter. Its highly defensive healthcare portfolio, long-term contracts, and inflation-indeed lease agreements could stabilize its financials. The company currently pays a monthly dividend of $0.03/share, with its forward yield currently at 7.68%.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust and TELUS. The Motley Fool has a disclosure policy.

More on Dividend Stocks

A worker gives a business presentation.
Dividend Stocks

TSX Communications in April 2024: The Best Stocks to Buy Right Now

Here are two of the best TSX communication stocks you can buy in April 2024 and hold for years to…

Read more »

Man considering whether to sell or buy
Dividend Stocks

Royal Bank of Canada Stock: Buy, Sell, or Hold?

Royal Bank of Canada (TSX:RY) has a high dividend yield. Should you buy it?

Read more »

Businessman looking at a red arrow crashing through the floor
Dividend Stocks

BCE’s Stock Price Has Fallen to its 10-Year Low of $44: How Low Can it Go?

BCE stock price has dipped 39% in two years and shows no signs of growth in the next few months.…

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

Invest $10,000 in This Dividend Stock for $3,974.80 in Passive Income

This dividend stock gives you far more passive income than just from dividends alone, so consider it if you want…

Read more »

Payday ringed on a calendar
Dividend Stocks

This 6% Dividend Stock Pays Cash Every Month

Can a 6% dividend yield help you build a monthly retirement income? An investment made right can help you build…

Read more »

Payday ringed on a calendar
Dividend Stocks

Passive Income: How Much Should You Invest to Earn $1,000 Every Month?

These three monthly-paying dividend stocks can help you earn a monthly passive income of $1,000.

Read more »

Dividend Stocks

3 Dividend Stocks to Double Up on Right Now

Some of these dividend stocks will take longer to recover than others, but they'll certainly pay you to stick around.

Read more »

TFSA and coins
Dividend Stocks

TFSA Passive Income: How Much to Invest to Earn $250/Month

Want to earn $250/month of tax-free passive income? Here are four Canadian dividend stocks to look at buying in your…

Read more »