BUY ALERT: 3 Cheap Dividend Stocks to Buy Now

Canadians should target cheap dividend stocks like Cogeco Communications Inc. (TSX:CCA) after a sharp dip.

| More on:

The S&P/TSX Composite Index was up 100 in late-morning trading on November 16. Base metals and health care were in the middle of another rough day. Meanwhile, the TSX has been on fire over the course of 2021. This has made it challenging for value investors to hunt for discounts. However, recent volatility has provided some solid opportunities. Today, I want to look at three undervalued dividend stocks to buy today.

This under-the-radar stock just plunged sharply after earnings

Boyd Group (TSX:BYD) is a Winnipeg-based company that operates non-franchised collision repair centres in the United States and Canada. Shares of this dividend stock have dropped 2.9% in 2021 at the time of this writing. Its recent post-earnings dip wiped out its 2021 gains, pushing it into the red for the year-to-date period.

The company released its third-quarter 2021 results on November 10. Sales rose 28% year over year to $490 million, as Boyd Group also posted same-store sales growth of 10%. Meanwhile, gross profit jumped 19% from the prior year to $215 million. Adjusted EBITDA dropped 18% from the previous year to $51.5 million.

Shares of this dividend stock are trading at favourable levels in comparison to its industry peers. It last had an RSI of 19. That puts Boyd Group deep in technically oversold territory.

Here’s why I’m snatching up this dividend stock on the dip

Back in September, I’d discussed why investors might want to snatch up one of the top telecom stocks on the dip. Cogeco Communications (TSX:CCA) is one of my favourite dividend stocks to buy in this sector right now. Its shares have climbed 3% in the year-to-date period. However, the stock has slipped 6.6% month over month.

Cogeco posted its fourth-quarter and full-year 2021 earnings on November 11. Revenue increased 4.5% year over year to $632 million. Meanwhile, adjusted EBITDA dipped 1.3% to $290 million. Profit jumped 7.5% to $103 million. Moreover, cash flows from operating activities climbed 10% to $281 million. Cogeco saw its Canadian broadband services revenue increase 10% from the prior year largely due to its DERYtelecom acquisition, which was completed in December 2020.

This dividend stock possesses an attractive P/E ratio of 11. Its shares last had an RSI of 21. That puts Cogeco well into technically oversold levels. It also offers a quarterly dividend of $0.705 per share. This represents a 2.8% yield.

One more cheap dividend stock to consider today

Intertape Polymer (TSX:ITP) is a Montreal-based company that provides packaging and protective solutions for the industrial markets around the world. Shares of this dividend stock have increased 13% in the year-to-date period.

In Q3 2021, the company delivered revenue growth of 22% to $395 million. This was powered by higher selling prices in tape, film, woven, and protective packaging products while raw materials experienced a pricing spike. However, net earnings dropped $1.4 million from the prior year to $25.3 million, or $0.42 per diluted share.

The dividend stock last paid out a quarterly distribution of $0.17 per share. That represents a 3.1% yield. It possesses an RSI of 36, putting it on the cusp of oversold territory.

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 Boyd Group Services Inc.

More on Dividend Stocks

analyze data
Dividend Stocks

Here’s Why the Average TFSA for Canadians Aged 41 Isn’t Enough

The average TFSA simply isn't enough for most Canadians in their early 40s. Here's how to catch up.

Read more »

cloud computing
Dividend Stocks

Insurance Showdown: Better Buy, Great-West Life or Manulife Stock?

GWO stock and MFC stock are two of the top names in insurance, but which holds the better outlook?

Read more »

concept of real estate evaluation
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on It

Canadian REITs can turn your TFSA into a monthly paycheque machine for life. Here's how Morguard North American Residential REIT…

Read more »

A plant grows from coins.
Dividend Stocks

The Smartest Dividend-Growth Stocks to Buy With $1,000 Right Now

New dividend-growth investors should consider CN Rail (TSX:CNR) stock and another top play if they're looking to build wealth over…

Read more »

Dividend Stocks

The 3 Top Canadian Stocks to Buy With $1,000 Right Now

If you want consistent income, look to consistent dividend payers. These three stocks are some of the best in the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Want a 6% Average Yield? 3 TSX Stocks to Buy Today

These stocks pay good dividends that should continue to grow.

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

Is Alimentation Couche-Tard Stock a Buy for its 0.9% Dividend Yield?

Couche-Tard stock's small yield is not enticing, but its growth potential could be a wealth creator.

Read more »

Hourglass and stock price chart
Dividend Stocks

5.2% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades!

With its 5.2% dividend yield, Toronto-Dominion Bank (TSX:TD) is a stock I'm eagerly buying.

Read more »