Macroeconomic uncertainties and growing geopolitical tensions are keeping the Canadian stock market turbulent of late. In such difficult economic environments, holding some quality dividend stocks in your portfolio might be of great help as they can help you earn steady dividend income, despite market uncertainties.
And if you’re looking for some cheap dividend stocks, here are two of them, trading under $10 per share, you can buy in October 2023.
Lundin Mining stock
Lundin Mining (TSX:LUN) is a Toronto-headquartered metal mining company. It has a market cap of $7 billion, as LUN stock trades at $9.07 per share with 9.1% year-to-date gains. At this market price, the stock offers a decent 4% annualized dividend yield and distributes its dividend payouts on a quarterly basis.
In the second quarter of 2023, Lundin’s revenue remained nearly flat on a YoY (year-over-year) basis at US$588.5 million with the help of a sequential increase in its gold and copper production at its Chapada mine. With lower exploration and business development-related costs, the metal miner posted an adjusted quarterly net profit of US$16 million, reflecting massive improvement over its loss of US$35.3 million in the second quarter of 2022. Although the mark-to-market valuation of its unexpired foreign exchange and diesel derivative contracts are likely to affect its third-quarter financial results, the company seems on track to achieve its copper, gold, and nickel production guidance for the full year 2023.
Besides that, Lundin’s continued focus on expanding its high-quality asset base by making new acquisitions brightens its long-term growth outlook, which should help its share prices soar.
Algonquin Power & Utilities stock
Algonquin Power & Utilities (TSX:AQN) could be another quality but cheap Canadian dividend stock you can buy in October 2023 to hold for the long term. This Oakville-based diversified utilities company currently has a market cap of $3.6 billion, as its stock trades at $5.15 per share after witnessing 21% value erosion so far in 2023. AQN stock has a strong annualized dividend yield of 8.3% at this market price.
A sharp decline in AQN stock started after the company announced its second-quarter results in August. During the quarter, its revenue witnessed a minor increase of 0.6% YoY to US$627.9 million. However, weak renewable segment performance and lower customer demand in its regulated services segment due mainly to unfavourable weather drove its adjusted quarterly earnings down by 50% YoY to US$0.08 per share. This could be one of the reasons this dividend stock has slid sharply in recent months.
In another major business update, Algonquin Power & Utilities recently told investors that it will pursue the sale of its renewable energy portfolio, including wind, solar, and hydro assets. The company’s management expects that its renewables business “would be better positioned to accelerate its growth under a different ownership structure,” and its sale could help AQN reduce the cost of capital and maintain dividends.
While this separation move may seem like a negative development at first glance, it can increase the company’s focus on improving efficiencies and boost the profitability of its well-established regulated utility business. That’s why Algonquin Power & Utilities’ plan to sell the renewables business might prove to be positive for its investors in the long run.
