Just because the TSX Index has been getting hot doesn’t mean it’s too late to snag the value plays before this market rally has a chance to broaden out a bit. As the economy heals from the wounds of COVID and years of inflation that followed, the following trio of dividend stocks, I believe, looks like a fabulous value for investors who seek to get the most from every dollar.
Heck, if you’re looking to stretch every dollar as far as it can go over at the local retailer, why not seek to do the same when it comes to stocks you’re considering for your investment portfolio?
Without further ado, here are two passive income plays I’d potentially pursue as we move into the summer months. Whether the TSX Index heats up for summer, though, remains the big question. I think there are far too many variables to come to a conclusion at this juncture. Either way, the following stocks seem undervalued for investors seeking to hold for the next four years or more.
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TD Bank
TD Bank (TSX: TD) stock remains one of my favourite banks in the Big Six basket right now. Not just because it’s got a robust U.S. retail business (its peers also have impressive exposure south of the border), either.
The company has an incredibly sound balance sheet that it may use to pursue potential deals in the U.S. regional scene. Undoubtedly, I’m sure TD Bank will be more cautious regarding the price it’ll stand to pay this time around following its prudent (and probably wise) decision to walk away from a deal that seemed close to going through early last year.
Beyond the balance sheet, TD Bank is one of the tech-savviest banks out there, as I described in my previous piece on banks with potential AI upside.
Just days after that piece was published, TD announced a partnership in the cloud with none other than AI kingpin Google – an Alphabet (NASDAQ: GOOGL) business. The deal could help TD accelerate its innovative efforts as high-tech and banking come together.
I’m a huge fan of TD’s tech prowess and the dirt-cheap 12.7 times trailing price-to-earnings multiple. And, of course, there’s the more than 5% yield to look forward to, as well!
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX: ATD) is arguably the most impressive growth-focused retailer in the country. Its performance has been incredible, and as the firm continues firing on all cylinders, the stock could continue roaring higher as earnings continue to rise in a steady fashion.
Going into April, I think investors are getting an absolute gift with shares of ATD. The stock shed more than 13% of its value in an ugly spring-time correction on no real bad news. Personally, I view such dips as golden opportunities, but ones that probably won’t last forever.
Did ATD stock over-extend when it flirted with $87 per share earlier this year? I didn’t think so. Regardless, I relish such corrections as opportunities to top up. Should the correction extend to 15%, I may just add to my already sizeable position in the Circle K-owner, even if its coming quarter runs into more speed bumps.
The dividend isn’t massive, with a yield of 0.91%. However, if it eclipses 1%, I think it’d be time to get greedy, as Couche-Tard is an underestimated dividend grower.
