These 3 Dividend Stocks (With Great Yields) Are on Sale Now

Given their solid cash flows and cheaper valuation, these three dividend stocks are excellent buys right now.

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Investing in high-yielding dividend stocks is one of the better means to earn a stable passive income. Dividend stocks have historically outperformed the broader equity markets while minimizing risks. Given their regular payouts, these companies are less susceptible to market volatility, thus providing stability to your portfolios in a volatile environment. Meanwhile, the following three TSX stocks offer over 7% dividend yields and trade at attractive valuations.

BCE

The Canadian telecom industry has been under pressure over the last 12 months due to rising interest rates and unfavourable regulatory decisions. The telecom sector is a capital-intensive business, so rising interest rates have increased the cost of financing, thus impacting profitability. Amid the broader weakness and downgrade from several analysts, BCE (TSX:BCE) has witnessed substantial selling over the last few months, losing over 32% of its stock value compared to its 52-week high.

However, the steep pullback offers an excellent entry point for long-term investors as the demand for telecommunication services continues to rise amid digitization. BCE recently acquired 939 licenses that could aid in expanding its 5G services across Canada. Further, the company is also working on lowering its debt levels. It has slashed 4,800 jobs, which could deliver an annualized cost savings of $250 million. The company has also reduced its capital expenditure and dividend growth. With the Federal Reserve indicating rate cuts later this year, the company’s interest expenses could also fall.

Amid the selloff, BCE’s forward dividend yield has increased to 9.02%, while its NTM (next-12-month) price-to-sales multiple stands at 1.6, making it an attractive buy.

TC Energy

Another high-yielding dividend stock I am bullish on is TC Energy (TSX:TRP), which transports oil and natural gas across North America. The company has signed long-term contracts with its clients, with around 97% of its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) underpinned by long-term contracts and rate-regulated assets. So, its financials are less susceptible to commodity price fluctuations, thus delivering stable and predictable cash flows irrespective of the economic environment.

Amid healthy cash flows, TC Energy has raised its dividend at an annualized rate of 7% since 2000. It pays a quarterly dividend of $0.96/share, with its forward yield at 7.72%.

Further, TC Energy expects to invest around $8-$8.5 billion this year, putting $7 billion of projects into service. After generating $5.3 billion last year through divesting its assets, the company is progressing with its divestment activities and expects to generate $3 billion this year. The proceeds from the asset sales could help lower its debt levels, thus reducing its interest expenses. Given its healthy growth prospects, stable cash flows, and improving financial position, I believe TC Energy’s future dividend payouts are safe. Also, its valuation looks cheap, with its NTM price-to-earnings multiple at 12.1.

NorthWest Healthcare Properties REIT

Amid an increase in leverage and rising interest rates, NorthWest Healthcare Properties REIT (TSX:NWH.UN) was under pressure over the last 12 months. However, the company has taken several initiatives to strengthen its financial position, such as divesting non-core assets, slashing dividends, and amending and refinancing its debt facilities. The company reported a healthy occupancy and collection rate of 97% and 99%, respectively, in the fourth quarter.

Further, the company owns and operates a highly defensive healthcare portfolio with long-term lease agreements with its clients. Also, a substantial percentage of its rent is inflation-indexed, thus shielding its financials from rising expenses. Given its improving operating performance, strengthening of financial position, and an attractive dividend yield of 7.09%, I believe NorthWest Healthcare would be an excellent buy.

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. The Motley Fool has a disclosure policy.

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