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Interest rates are coming down and Canada’s many dividend stocks are on the rise. This dynamic is a big reason for the 17% rise on the TSX Index in 2024 so far.
Returns from Guaranteed Investment Certificates (GICs) and money market funds no longer look attractive, so stocks are the place for passive income again. If you are wondering what dividend stocks to buy, here are three to consider adding now.
A real estate stock for income and value
If you want a bit of income, value, and safety, First Capital Real Estate Investment Trust (TSX:FCR.UN) is attractive. Its stock is up 41% over the past year. However, it still trades 17% below its pre-COVID price. It also trades at an 18% discount to its net asset value (its portfolio market value after deducting debt).
This gap doesn’t seem reasonable. First Capital has a portfolio of very attractive urban-focused retail properties across Canada. Its properties are located close to crucial transport and commerce hubs.
Its tenants are made up of grocery stores, banks, pharmacies, discount and value stores, hardware, and liquor stores. Its top locations have helped it deliver strong +96% occupancy and attractive rental rate growth.
The company has ample land and development assets that are hardly valued in the stock. It has upside as it monetizes some assets and further de-levers. It pays a 4.77% distribution yield today.
An energy stock with a top dividend growth record
Canadian Natural Resources (TSX:CNQ) is a premium dividend-growth stock. It has consecutively increased its dividend per share for 25 years. It has grown that dividend by a 21% compounded annual rate over that time.
If you think about it, that dividend growth occurred through some pretty tough periods like 2014 and 2020 (when oil prices even dipped negative). Canadian Natural’s resilience comes from its excellent, multi-decade resources and its wise capital allocation.
While oil prices have recently dipped, it has taken the opportunity to consolidate resources in regions in which it already operates. That may temporarily slow its shareholder return strategy. However, it creates a more resilient and profitable portfolio in the future.
That is one reason this company has been so successful. It thinks long term, and it is very thoughtful about how it invests. Canadian Natural stock has recently pulled back. It’s a nice time to add a quality dividend stock with a 4.46% yield.
A financial stock with a fast-growing dividend
With a 2.7% dividend yield, goeasy (TSX:GSY) may not have the highest yield. However, when you consider it has grown its dividend per share by a 30% compounded annual growth rate (CAGR), that yield doesn’t look as small.
Such incredible dividend growth has been supported by equally strong earnings-per-share growth. Earnings per share is up 963% in the past 10 years. goeasy has become one of the largest non-prime lending platforms in Canada in that period.
The great news is that its growth trajectory is far from over. It still has plenty of room to expand its vehicle-lending service program as well as grow its buy now-pay later programs. A new credit card product could also create a whole new lending vertical.
goeasy stock has pulled back 13% in the past three months. You can nab this growth stock for less than 10 times earnings right now.
