The TSX Composite Index has risen more than 4.2% so far this year after soaring to a fresh all-time high in May 2024. Although concerns about the timing of more rate cuts in Canada are keeping investors cautious and stocks volatile, the overall long-term market outlook still remains optimistic as the Bank of Canada recently started cutting interest rates, with the U.S. Federal Reserve expected to follow suit in the coming months.
Despite the broader market rally in 2024, however, many large-cap dividend stocks with consistently soaring dividends still look undervalued, making them look really attractive to buy now and hold for the long term. In this article, I’ll highlight two safe TSX dividend stocks that have increased their dividends for at least 10 consecutive years and have strong fundamentals to support their future dividend growth.
Magna International stock
Magna International (TSX:MG) is the first TSX dividend stock to consider buying on the dip right now, with a history of increasing dividends for well over 10 years. This Aurora-headquartered automotive supplier and mobility firm has a market cap of $16.6 billion as its stock currently trades at $58.16 per share after witnessing about 26% value erosion so far in 2024, underperforming the broader market by a wide margin. At this market price, MG stock has a 4.4% annualized dividend yield, and its dividend per share surged by 188% over the 10 years between 2013 and 2023.
Even as Magna’s share prices have seen a steep decline of late, it doesn’t mean that the company is facing any fundamental issues. On the contrary, the company’s financial growth trends remain strong, making it look undervalued to buy for the long term. In the 12 months ended in March 2024, its total revenue rose around 11% YoY (year over year) to US$43.1 billion, while its adjusted earnings during the same period climbed by a solid 37% to US$5.37 per share.
In addition to Magna’s dominance in the global automotive industry, its robust financial position and focus on new mobility and electric transportation solutions make it a great long-term investment. That’s why MG stock looks like a steal at the current market price.
TD Bank stock
Toronto-Dominion Bank (TSX:TD) has slid by around 12% so far in 2024, trading at $75.41 per share with a market cap of $132.3 billion. These declines currently make it the worst-performing Canadian bank stock of 2024, making it appear undervalued despite its strong fundamentals. TD stock has a 5.4% annualized dividend yield at the current market price, and the bank has raised its dividend per share by around 137% over the 10 years between its fiscal year 2013 and 2023 (ended in October 2023).
In the second quarter (ended in April) of its fiscal year 2024, TD Bank’s revenue rose 10.2% YoY to $13.8 billion. During the quarter, its net profit from the Canadian personal and commercial banking segment also improved by 7% from a year ago to $1.74 billion. Although its quarterly profitability was affected by a $615 million provision for ongoing anti-money-laundering investigations in the United States, its latest results continued to reflect operational resilience. Moreover, TD stock’s consistent focus on maintaining a solid capital position and expanding digital banking capabilities brightens its long-term growth outlook, which can help its share prices recover fast.
