Dividend all-stars tend to be smart buys whenever they fall at the hands of a broader market pullback. Indeed, it’s been a rather turbulent start to 2025, with the TSX Index retreating just north of 1% in the first few trading sessions of the year, putting it down just north of 4% from all-time highs. Indeed, call it a “half correction,” if you will, but the TSX Index looks ripe for buying if you view 2025 as a year of continued economic growth. Indeed, there are a plethora of things to worry about as a Canadian investor, most notably Donald Trump’s tariffs and “51st state” talks.
In any case, I think following a long-term game plan continues to be the best move, rather than overreacting to fear-driving events, many of which may never see the light of day.
Of course, tariffs and inflation are real threats that could weigh heavily on Canadians’ spending power this year. That’s why it’s vital to ensure you’re properly invested so you can score a real return (that’s a gain after inflation) in a year that could see “more of the same” when it comes to macro headwinds and all the sort.
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Halfway to a correction?
The dividend all-star stocks, I believe, are among the best names that a self-guided Canadian investor should consider picking up at current levels. Indeed, the TSX Index may be halfway to a correction, but numerous other names are already deep into correction territory (a drop of at least 10%), with some fending off a bear market (that’s a 20% drop from peak levels). It’s these market bargains that lead me to believe that Boxing Day has come a few weeks late this year!
So, without further ado, let’s check out two dividend payers (one Canadian and one U.S.) that are looking cheap in a wobbly, still-pricey market.
McDonald’s
McDonald’s (NYSE:MCD) stock got rocked this year, as the E.Coli woes knocked the stock off its all-time highs. Though the matter has been dealt with and is now a thing of the past, the stock remains down just over 10% from its high.
Shares are even lower than where they sat in the heat of the E.Coli panic. Indeed, the broader market has dragged most names south. And while McDonald’s may still have industry headwinds to face in 2025, I view the name as an absolute bargain that’s being unfairly punished.
Recently, McDonald’s stock won a big price target hike over its comeback chances. Whether we’re talking about the revamped value menu or the rise of the Big Arch (one of the tastiest burgers on the market, in my opinion) and other menu innovations, McDonald’s has the tools to march higher again. With a nice 2.5% dividend yield, there’s a lot to love about MCD this January!
Restaurant Brands International
Restaurant Brands International (TSX:QSR) stock is another dividend grower in the restaurant scene that could enjoy a nice comeback year. The stock is at new 52-week lows of $87 and change and boasts a dividend yield of 3.81%.
With a mere 15.2 times trailing price-to-earnings (P/E) multiple, the fast-food firm looks like an absolute steal. Indeed, the company has high ambition to expand internationally with its chains. More recently, the firm highlighted some plans to expand upon its Firehouse Subs chain. Indeed, there’s a lot of growth to be had from the hibernating dividend titan, which may be about to pick up traction as we progress through this new year.
