Market corrections can feel nerve-wracking. Red numbers, falling valuations, and talk of recession can unsettle even seasoned investors. But for those focused on the long game, corrections are often moments of opportunity. When stock prices fall across the board, high-quality companies with strong fundamentals and reliable dividend histories often get unfairly punished, allowing investors to buy them at more attractive valuations.
This is especially true for dividend-paying stocks. During downturns, stable companies with resilient cash flow and shareholder-friendly policies become even more appealing. Not only can you lock in higher yields, but you can also position yourself for long-term capital appreciation as markets rebound. Let’s look at four standout Canadian dividend stocks currently offering value in the wake of recent market softness.
CIBC
Canadian Imperial Bank of Commerce (TSX:CM) is one of Canada’s Big Five banks and has long been a staple for dividend investors. With a current dividend yield of around 4.8%, the bank offers one of the most generous payouts in the financial sector. In its latest earnings report for the first quarter of fiscal 2025, CIBC posted earnings of $2.19 per share, well above analyst expectations of $1.96. This marked a healthy increase from $1.74 per share the year prior, signalling strong operational momentum.
The earnings beat was driven by lower-than-expected credit loss provisions and solid performance in its commercial and wealth management divisions. CIBC’s capital position remains strong, with a CET1 ratio of 13%, offering a buffer against economic uncertainty. Its long-term dividend growth and stable payout make it a compelling option for investors seeking reliable income, particularly at current discounted share prices.
BCE
BCE (TSX:BCE), Canada’s largest telecom company, is known for its stability and dependable dividend. As of now, BCE shares yield approximately 12.2%, one of the highest on the TSX. In its fourth-quarter 2024 results, the dividend stock reported earnings of $0.79 per share, beating expectations of $0.71 and improving on the $0.716 per share from the year before.
BCE continues to invest in its 5G and fibre networks, ensuring long-term growth despite short-term headwinds like higher interest rates and regulatory scrutiny. While telecom stocks have been under pressure due to rising borrowing costs, BCE’s ability to maintain strong cash flow and prioritize dividend payments stands out. For investors looking to hedge against volatility with income-generating assets, BCE remains a compelling pick.
TC Energy
TC Energy (TSX:TRP) is a vital part of North America’s energy infrastructure, operating over 93,000 kilometres of natural gas pipelines. In Q4 2024, the company reported adjusted earnings of $1.05 per share, surpassing analyst forecasts of $1.00. Even more notable was its 3.3% dividend increase, bringing its quarterly payout to $0.85 per share – a clear sign of management’s confidence in future cash flows.
The dividend stock’s growth was driven by its Canadian and Mexican pipeline operations, which saw record delivery volumes amid growing demand. With a dividend yield around 5% at writing, TC Energy remains a solid choice for income-seeking investors, especially as energy demand continues to rise and infrastructure spending remains robust.
Imperial Oil
Imperial Oil (TSX:IMO) is a heavyweight in Canada’s oil and gas sector. In Q4 2024, the dividend stock posted net income of $1.2 billion, or $2.37 per share, down slightly from the $2.47 per share the year before due to lower crude prices. Still, the company raised its dividend by 20%, highlighting confidence in its operations and long-term outlook.
Imperial’s production rose to 460,000 barrels of oil equivalent per day, driven by record output at its Kearl site. The dividend stock has also been actively repurchasing shares and investing in lower-emission technologies, positioning itself well for both current profitability and future sustainability. With a dividend yield near 2.8% and a history of shareholder-friendly policies, Imperial offers both growth and income potential.
Bottom line
Market corrections are when long-term investors can build or expand positions in quality dividend stocks at a discount. What’s more, many of these companies have underperformed the broader TSX in the short term. By focusing on companies with solid fundamentals, sustainable payout ratios, and sector leadership, you can make corrections work in your favour. These dividend stocks may be on sale now. Yet smart investors know bargains like this don’t last forever.
