The TSX Composite benchmark has been on a tear recently, reaching new all-time highs. In addition to the Bank of Canada’s recent monetary actions, investors’ growing hopes that the Federal Reserve will also consider slashing interest rates in the September meeting have mainly fueled this market rally.
However, the macroeconomic scenario still remains uncertain due mainly to the unpredictable outcome of these central banks’ policy moves. Considering that, it has become even more important than ever for investors to choose stocks that offer not only growth potential but also stability through consistent dividends. But the good news is that despite the strong recent broader market rally, there are still some undervalued dividend stocks that offer attractive yields on the TSX today. Here are two such Canadian dividend stocks you can consider doubling up on right now before they get too expensive.
Great-West Lifeco stock
If you’re looking for an undervalued dividend stock that hasn’t seen much appreciation of late despite the broader market surge, Great-West Lifeco (TSX:GWO) could be a great pick for your portfolio. This Winnipeg-headquartered company offers a variety of financial products to its customers, including life insurance, health insurance, and investment services.
It currently has a market cap of $40.3 billion, as its stock trades at $43.28 per share with a 1.3% year-to-date loss. At this market price, GWO stock offers an attractive 5.1% annualized dividend yield and distributes its dividends every quarter.
In the second quarter of 2024, Great-West Lifeco’s revenue remained nearly flat on a YoY (year-over-year) basis at $8.8 billion but exceeded Street analysts’ expectations of $5 billion by a huge margin. Favourable market conditions and effective cost management also helped the company post a 12.1% YoY increase in its adjusted quarterly earnings to $1.11 per share.
As Great-West continues to integrate recent acquisitions and focuses on expansion into new markets, including Germany’s real estate sector, its financial growth trends could improve in the years to come, making it an attractive dividend stock to bet on right now.
Veren stock
Veren (TSX:VRN), which was previously known as Crescent Point Energy, could be another quality Canadian dividend stock to buy at a bargain right now. This Calgary-headquartered energy firm focuses on oil production from its assets in central Alberta and southeast and southwest Saskatchewan. After witnessing 11.6% value erosion over the last year, VRN stock currently trades at $9.86 per share with a market cap of $6.1 billion. Just like Great-West Lifeco, Veren also distributes its dividend payouts every quarter and offers a 4.7% annualized dividend yield at the current market price.
The strong performance of its Alberta Montney and Kaybob Duvernay assets helped Veren achieve YoY improvement in its second-quarter average production to 192,648 boe/d (barrels of oil equivalent per day). As a result, its total revenue surged by 32.2% from a year ago to $1.1 billion. Despite recent weakness in commodity prices, the oil producer’s adjusted quarterly earnings rose 7.7% YoY to $0.42 per share, exceeding Street analysts’ estimates.
With this, Veren remains on track to achieve its 2024 production guidance of 191,000 to 199,000 boe/d, with an expected excess cash flow of $825 million for the full year. These positive factors, along with the company’s focus on debt reduction, boost its long-term growth outlook, which could help its share prices soar.
