Despite the market continuing to roar higher, some stellar dividend giants still trading at cheap levels are worth buying right now.
Buying those beaten-down dividend giants while they are down can provide a huge boost to any long-term portfolio. Fortunately, there’s a trio of options for investors to consider buying.
Source: Getty Images
Start with a big bank with a big income
The first of the beaten-down dividend giants to buy is Toronto-Dominion Bank (TSX: TD). Canada’s big bank stocks are superb long-term picks for any portfolio. They’re also doing very well on the market this year.
But when it comes to TD, Canada’s second-largest lender isn’t faring as well as it could be.
As of the time of writing, TD trades just a bit off its 52-week high. That being said, the bank still trades at a P/E of just 10.6, which is lower than it has traded at over the past decade.
Part of the reason for that is because TD is still recovering from the fallout of its failed expansion and subsequent issues with U.S. regulators.
Both a hefty fine and an asset cap in the U.S. market left TD investors stunned, but the bank carries on.
Specifically, the bank still offers a 4.2% dividend and plenty of growth opportunities both in the domestic market and in its growth-focused U.S. segment.
Sprinkle in some would-be landlord love
REITs are insanely great options for income-seeking investors. One of those REIT dividend giants to buy now is RioCan Real Estate (TSX: REI.UN).
RioCan is one of the largest REITs in Canada, with a growing portfolio of mixed-used residential properties. That mix is a shift from the REIT’s traditional focus on commercial retail properties, and represents a huge opportunity for investors.
That’s because RioCan is targeting key metro markets along transit lines where demand remains strong. Furthermore, the properties comprise both residential and commercial retail. This makes them appealing to multiple segments.
The end result is a superb investment that generates a monthly distribution, much like a landlord collecting rent.
As of the time of writing, RioCan boasts a juicy 6.5% yield, and despite the market trending up, it still trades flat year-to-date.
Finish with a long-term growth and income gem
One final option to consider among the list of dividend giants to buy is BCE (TSX: BCE). BCE is one of the largest telecoms in Canada. Telecoms generate a reliable revenue stream that is backed by multiple subscriber-focused segments.
In the case of BCE, the company boasts wireless, wireline, internet and TV segments. And while those provide a reliable (and by extension, defensive) source of revenue, they are also expensive to upgrade.
Given the elevated interest rates we’ve seen in recent years, the pressure on BCE’s stock price has been immense. As of the time of writing, the stock trades flat this year, but is down nearly 28% over the trailing 12-month period.
That drop led to BCE needing to trim costs and slash its dividend. Fortunately, despite that dip, the stock still offers a quarterly dividend with a yield of 5.8%.
BCE has also improved immensely when it comes to results, posting net earnings of $683 million, reflecting a solid 49.5% increase over the prior period.
In other words, this is one of the beaten-down dividend giants that is recovering.
Final thoughts
No stock, even the most defensive, is not without some risk. The three stocks mentioned above, despite their beaten-down status, still boast significant long-term potential.
In my opinion, a small position in one or more of these stocks should be in every long-term portfolio.
