Some of the best dividend opportunities in the market come up when short-term investor worries push a solid stock lower. A falling share price can lift the yield and create a better entry point, provided the underlying business still generates cash and has a believable plan to improve. That is why a pullback in a fundamentally strong stock deserves a closer look rather than an automatic rejection.
In this article, I’ll highlight two top Canadian dividend stocks that appear undervalued based on their long-term growth outlook and are more attractive after their recent dips.
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Cogeco Communications stock
For investors seeking dependable income after a pullback, Cogeco Communications (TSX: CCA) looks worth considering. The telecom provider offers internet, video, wireless, and wireline phone services across Canada and the United States. Its services are sold under brands like Cogeco, oxio, Breezeline, and welo.
CCA stock closed at $61.41 per share on July 28 with a market cap of about $2.6 billion. Its shares currently sit nearly 21% below their 52-week high. That weakness has pushed the stock’s annualized dividend yield to about 6.5%.
Much of the pressure on CCA stock comes from Cogeco’s U.S. operations. In the third quarter of its fiscal 2026 (ended in May), the company’s revenue fell 4.7% year-over-year (YoY) to about $697 million. Its American telecommunications revenue dropped about 10% as a smaller subscriber base, a higher mix of internet-only customers, and competitive pricing weighed on results.
On the brighter side, Cogeco’s Canadian revenue rose 0.5%, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in Canada increased 3.9%. More importantly, companywide adjusted profit climbed 29.2% YoY to nearly $100 million, and free cash flow grew 17.6%.
The stronger cash generation matters because Cogeco is still investing in long-term growth. Its wireless business continues to expand in both countries, and bundled fixed and mobile services are helping improve customer retention.
While competitive pressure in the United States remains a clear risk, its stronger free cash flow, growth in wireless services, and a high dividend yield make Cogeco Communications an attractive stock to consider after its recent decline.
Transcontinental stock
Another Canadian dividend stock that looks more interesting after a pullback is Transcontinental (TSX: TCL.A). The business provides retail marketing services, printing, and French-language educational publishing. After selling its packaging operations, Transcontinental is now directing more of its resources toward in-store marketing and education.
Currently, TCL.A stock trades at $5.47 per share with a market cap of about $470.6 million and offers a 3.7% annualized dividend yield. Although the stock has posted strong gains over the last year, it still trades nearly 11% below its 52-week high.
The company’s latest results reflected weaker demand in some traditional operations. In the second quarter of its fiscal 2026, the company’s revenue slipped 5% YoY to about $269 million because of lower volumes across both operating sectors.
Still, Transcontinental managed to limit the damage to profitability as its adjusted operating earnings before depreciation and amortization slipped just 1.7% YoY. Its recent acquisitions, cost reductions, and favourable exchange rates helped offset much of the impact from lower volume.
Similarly, the business also reported a 2% increase in its adjusted operating earnings to $29.9 million.
Moreover, its growth strategy is also becoming clearer. The PDI Group acquisition is expanding Transcontinental’s in-store marketing business, while the nationwide rollout of its raddar platform opens another path for growth. New multi-year printing agreements with Postmedia and Glacier should also add volume to its traditional operations.
While Transcontinental still faces near-term pressure from lower activity in some legacy businesses, a more focused portfolio, lower leverage, and several growth projects give the company a stronger base. For patient investors, that mix could make the stock worth buying during periods of weakness.
