When high-quality TSX dividend stocks sell off sharply, it often creates some of the best long-term buying opportunities for patient investors who are willing to buy and hold for the long haul. That’s especially true when the underlying businesses are still strong, still profitable, and still positioned to generate reliable cash flow for years to come.
A 30% drop in a stock’s price doesn’t automatically mean something is wrong with the company. In many cases, these selloffs are driven by short-term headwinds, shifting interest rate expectations, or investors temporarily losing patience. Those situations are often exactly what long-term investors should be waiting for.
The highest-quality dividend stocks are meant to be owned for years, not traded in and out of. So when you can buy them at a discount, you still get exposure to all of their long-term growth potential and dividend income, but now you’re also locking in a higher yield on cost and giving yourself more upside as the business continues to grow from a lower entry point.
What’s important to understand, though, is that not every stock that’s down 35% is worth buying. The key is finding businesses that are cheap for the right reasons, and then making sure they have durable operations, sustainable dividends, and balance sheets strong enough to ride out volatility without sacrificing long-term growth.
So, with that in mind, if you’re looking for magnificent TSX dividend stocks to buy now, here are two ultra-cheap picks you can add today and confidently hold for years to come.
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One of the best TSX dividend stocks to buy now
If you’re looking for a high-quality TSX dividend stock to buy while it’s undervalued, Canadian Apartment Properties REIT (TSX: CAR.UN) is one of the best options Canadians have today.
CAPREIT, as it’s known, is trading roughly 30% below its high reached last year and nearly 40% from its all-time peak in 2021, creating a significant buying opportunity for investors.
As the largest residential real estate investment trust (REIT) in Canada with a massive, well-diversified portfolio of residential real estate properties spread across the country, CAPREIT is about as reliable as it gets.
People always need a place to live, which is why CAPREIT has been able to generate steady cash flow through a wide range of economic environments.
Therefore, the fact that CAPREIT trades so cheaply and its dividend yield has risen dramatically makes it one of the best dividend stocks to buy on the TSX today.
In fact, CAPREIT’s dividend yield now sits at 4.2%. That’s well above its five- and 10-year average forward dividend yields of 3.1% and 3.3%, respectively.
In addition, CAPREIT is trading at a forward price-to-adjusted funds from operations (P/AFFO) ratio of just 15.5 times today. That’s not just well below its five- and 10-year average forward P/AFFO ratios of 22.8 times and 23.5 times, respectively. It’s essentially the cheapest it’s ever been.
So, if you’re looking for top TSX dividend stocks to buy now and hold for years, CAPREIT and its current discount are offering investors a massive opportunity.
A high-potential growth stock offering an attractive yield
In addition to CAPREIT, another top TSX dividend stock to buy while it’s trading this cheaply is goeasy (TSX: GSY).
The non-prime lender is now down roughly 40% from its 52-week high, despite the fact that the underlying business continues to perform exceptionally well.
Although the stock has temporarily pulled back due to higher bad debt expenses earlier this year, what has separated goeasy from most lenders over the years is its execution and discipline.
goeasy has an incredibly strong underwriting process, is heavily focused on risk management, and has grown its loan book steadily in order to keep charge-off rates stable. That’s exactly why it’s been able to deliver one of the strongest long-term track records on the TSX.
Over the last five years, goeasy has increased its dividend by more than 120%. Furthermore, after the recent selloff, that dividend now offers a yield of more than 4.5%. On top of that, goeasy still pays out less than 40% of its earnings through the dividend.
That alone goes to show just how reliable goeasy is. So, if you’re looking for a top TSX dividend stock to buy now, there’s no question that goeasy is one of the best to consider while it trades this cheaply.
