2 Canadian Dividend Stocks That Still Look Cheap Today

Cheap dividend stocks are getting harder to find. The TSX has climbed, interest-rate fear has eased, and income investors have already moved back into plenty of familiar names. But not every strong dividend stock looks expensive yet. Some still trade at prices that leave room for income, recovery, and long-term gains. That’s why two I’d look at today are Bank of Nova Scotia (TSX: BNS) and Keyera (TSX: KEY).

BNS

Scotiabank stock has spent years frustrating investors. The stock lagged other Canadian banks, partly because of concerns around its international business, credit losses, and slower earnings growth. That weak stretch left the bank trading at a discount to some of its larger peers. For patient investors, that creates a more interesting setup.

Scotiabank stock remains one of Canada’s Big Six banks, with operations across Canadian banking, international banking, wealth management, and capital markets. Its brand, deposit base, and lending relationships still give it a powerful foundation. The turnaround won’t happen overnight, but the bank doesn’t need perfection to reward investors from today’s valuation.

In fact, Scotiabank stock reported second-quarter net income of $2.63 billion, or $2 per share, up from $2.03 billion, or $1.48 per share, a year earlier. Net interest income rose 4.8% to $5.5 billion, helped by lower deposit costs and steady loan demand. Its global banking and markets business also improved, with earnings rising to $457 million from $413 million.

That’s a better picture than investors saw during the tougher parts of the rate cycle. The dividend also remains a major part of the appeal. Scotiabank stock pays $1.14 per share each quarter, or $4.56 annually. Around recent prices, the yield sits near 3.7%. So for investors willing to wait, Scotiabank stock looks cheaper than many higher-confidence dividend names on the TSX.

KEY

Keyera offers a different kind of value. The company owns and operates natural gas and natural gas liquids infrastructure across Western Canada. It gathers, processes, stores, and moves energy products that producers need to reach markets. That puts Keyera in the middle of the energy system, without making it a pure oil or gas producer.

The stock doesn’t look dirt cheap after a strong stretch, but the dividend and long-term business still make it worth watching. Keyera pays $0.54 per share each quarter, or $2.16 annually. Around recent prices, that gives investors a yield close to 3.9%. For an infrastructure company tied to Canadian energy growth, that’s still a useful payout.

The latest quarter had some noise. Keyera reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $203 million, down from $298 million a year earlier. Excluding transaction costs tied to the Plains acquisition, adjusted EBITDA came in at $232 million.

In short, the headline decline may look disappointing, but the core infrastructure business kept performing. Keyera also continues to expand through acquisitions and energy infrastructure projects. If Western Canadian production remains strong and demand for natural gas liquids keeps growing, Keyera should have room to build cash flow over time.

Bottom line

Both stocks offer something useful today. Scotiabank stock gives investors a major bank at a still-reasonable price with a strong dividend. Keyera gives investors energy infrastructure income with long-term demand behind it. And together, these two can bring in some strong income from $7,000 alone.

For investors building income, value, and patience into a portfolio, BNS and KEY still look like two Canadian dividend stocks worth buying before the market fully warms back up to them.