3 Dividend All-Star Stocks to Buy This Summer

Canadians should not stop shopping for dividend all-star stocks like Magna International Inc. (TSX:MG)(NYSE:MGA) in the first weeks of summer.

| More on:

Last week, I’d focused on three dividend all-star stocks that were worth owning to kick off the summer. Some of the qualifiers for these dividend all-star stocks include dividend-growth history, the yield, and overall reliability. In this previous article, I’d targeted stocks in energy, banking, and grocery retail. Today, we are going to dip into three different sectors. Let’s jump in.

This mortgage insurer is one of my favourite dividend all-star stocks

Back in June, I’d suggested that Genworth MI Canada (TSX:MIC) was worth adding at its value entering the summer season. Shares of Genworth have dropped 32% in 2020 as of close on July 13. It is not too late for investors to get in on this attractive dividend all-star stock.

In the first quarter of 2020, Genworth demonstrated its ability to weather the storm of the COVID-19 pandemic. Net operating income only fell 1% year over year to $117 million while total premiums written rose 8% to $114 million. New insurance written increased on the back of a larger transactional mortgage originations market.

Shares of Genworth last had a price-to-earnings (P/E) ratio of 6.7 and a price-to-book (P/B) value of 0.8. This is very attractive value territory. Genworth also offers a quarterly dividend of $0.54 per share, which represents a tasty 6.6% yield. Moreover, the company has delivered dividend growth for 11 consecutive years.

The reopening should provide a boost for the auto industry

The COVID-19 pandemic has put pressure on the auto industry, but there is finally reason for optimism, as economies around the world aim for a reopening. Magna International (TSX:MG)(NYSE:MGA) is the largest auto parts manufacturer in North America. Its stock has dropped 11% in 2020 so far. However, shares are up 24% in the last three months.

Magna qualifies as a dividend all-star stock, because of its excellent balance sheet and strong track record. In Q1 2020, the company saw sales decrease 18% year over year to $8.7 billion. Meanwhile, cash from operations still climbed 8% to $639 million. Management is confident that Magna will be able to bounce back, as it pushes for a safe restart of production at its facilities.

Shares of Magna last had a favourable P/E ratio of 15 and a P/B value of 1.3. Magna has delivered annual dividend increases for 10 straight years. This dividend all-star stock currently offers a quarterly distribution of $0.40 per share, representing a 3.4% yield.

One more top dividend all-star to target today

The last dividend all-star stock I want to focus on today is Great-West Lifeco. This financial services company is engaged in life and health insurance, retirement and investment services, and asset management. Its shares have fallen 25% in 2020.

In Q1 2020, the company saw total base earnings in Canada rise to $273 million over $257 million in the prior year. However, weakness in the United States and Europe dragged down its total earnings for the quarter. Great-West is a dividend all-star stock because of its fantastic balance sheet and its impressive yield and history.

Its stock last possessed an attractive P/E ratio of 10 and a P/B value of 1.0. Moreover, Great-West offers a quarterly dividend of $0.438 per share. This represents a monster 7.3% yield. The company has delivered dividend growth for five consecutive years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Magna Int’l.

More on Dividend Stocks

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »

young people stare at smartphones
Dividend Stocks

GST/HST “Vacation”: Everything Canadians Need to Know

The GST/HST "vacation" is a little treat for the holidays, along with a $250 payment. What should you do with…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »