If you’re retired and looking for deep value and a growing dividend this January, you’ve come to the right place. In this piece, we’ll check out two of the most intriguing, battered options that have already taken quite a sizeable hit in the back half of last year. Whether that means shares will be spared once the stock market falls into its next correction remains to be seen. Either way, it’s not hard to imagine that such battered names that have been slogging in recent months may have already spent enough time in the penalty box.
Let’s check out two fairly priced (even cheap-looking) dividend stocks that could shape up to be great buys before January 2025 comes to a close.
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Rogers Communications
Rogers Communications (TSX: RCI.B) is one of Canada’s Big Three telecoms. And like its hard-hit peers, shares have been in a world of pain in recent years, tanking nearly 38% in the past two years to multi-year lows. Undoubtedly, it’s not hard to imagine many yield-hungry investors are looking to the Canadian telecom scene despite the massive negative momentum and headwinds they face. Even if 2025 isn’t a comeback year for the telecoms (many analysts have continued to downgrade the big telecoms in recent weeks), I still think that sometimes you have to bite your lip and buy if there’s so much damage already in the rearview.
In the case of Rogers, the stock is down close to 46% from its all-time highs, which is pretty much in line with its two larger brothers in the scene. With a 4.85% dividend yield (high for Rogers’s standards but still well below the yield of its larger peers), the stock probably isn’t as enticing. Undoubtedly, you could easily score a yield north of 5% without having to jump into the deep end by bottom-fishing for a stock that’s showing few signs of bottoming out.
Either way, Rogers stock looks incredibly cheap at 14.3 times trailing price to earnings (P/E). Though growth may be limited in 2025, as immigration levels pull back a bit, I think much of such headwinds have already worked their way into the stock.
BCE
BCE (TSX: BCE) stock is another telecom heavyweight that retirees may be inclined to give up on. Shares offer a yield of 11.87% after crumbling over 54% from its highs. And though the yield may be sticking around for now, let’s just say I would be very surprised if it were to last another year unless the industry unexpectedly faces a 180-degree shift (something that’s unlikely, in my view).
In any case, I don’t think a dividend reduction would be met with a vicious sell-off. I’m not so sure how many shareholders are expecting the nearly 12% yield to stay intact, given the rapid descent in the share price and the lingering headwinds that could stick around for a while longer.
While I wouldn’t buy BCE for the dividend (it’ll probably be reduced at some point down the road), I would be intrigued if the firm were to expand south of the border for growth. Of course, such a move would entail a lot of spend at a time when rates aren’t exactly at rock-bottom levels. An analyst named Maher Yahghi thinks U.S. mergers and acquisitions could be worth looking into as the telecom titan seeks to correct course.
