While you’re shopping for gifts for family and friends, don’t forget to shop for quality dividend stocks that are on sale as well. These dividend stocks could be the ultimate gift for yourself, your children, and or grandchildren because the best dividend stocks paid dividends for decades and are likely to pay more dividends for decades to come!
Canadian Banks On Sale
Just on Monday, we saw Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) yielding 5%. This is one solid Canadian bank that has paid dividends since 1832. In fact, it has even increased dividends for 43 out of the last 45 years. (I think shareholders would forgive that it froze dividends instead of cutting them in 2009 and 2010 due to being cautious about the financial crisis.)
Even now, after Bank of Nova Scotia rebounded about 2.6% to the $57 level, it’s still a good buy for long-term investment. It yields 4.9%, and its fair value one year from now is around $73, based on its long-term historical multiple. This implies the bank’s shares are about 20% off.
Another bank that’s on sale is National Bank of Canada (TSX:NA). Similar to the Bank of Nova Scotia, National Bank of Canada pulled back to levels that yielded a high yield of 5.4%.
By Wednesday, it has rallied about 2% to $41. It still yields 5.3%, which is a good deal for the sixth largest bank of Canada. Its fair value one year from now is around $51. This implies the bank’s shares are also about 20% off.
Are these Canadian Pipeline Dividend Stocks On Sale?
On Monday, the pipeline companies were also on sale. Enbridge Inc (TSX:ENB)(NYSE:ENB) yielded up to 5.2% around $40 per share! It has already rallied 7.5% by Wednesday. At $44 per share now, it yields 4.8%. (Honestly, I didn’t expect to see Enbridge at a 5% yield because it’s a very rare phenomenon for the company.)
TransCanada Corporation (TSX:TRP)(NYSE:TRP) was actually cheaper last Monday (December 7th). It was priced as low as around $41 for a 5% yield. It has since rallied 15%. At $48 per share now, it yields 4.3%.
In my opinion, Enbridge is more on sale than TransCanada. Still, there’s always a trade-off. TransCanada is seen as higher quality because it has lower financial leverage. That’s why historically, we’ve seen Enbridge with higher growth (but it’s riskier comparatively).
Besides, TransCanada’s buy side seems to be exhausted in the short-term. As shown in the Daily technical chart above, it reached RSI 70 and is hitting resistance at its 200-day moving average.
So if you like the higher quality TransCanada, you might want to wait to see if it bounces off of the 200-day MA, and dips to a lower price before buying.
All dividend stocks discussed have a history of consistently paying dividends, if not, a history of increasing them.
- Enbridge has increased dividends for 19 consecutive years,
- TransCanada has done so for 14 years in a row,
- National Bank of Canada has increased dividends for 5 consecutive years, and
- Bank of Nova Scotia has done so for 4 years in a row.
For my dividend portfolio, I bought some shares of Bank of Nova Scotia on Monday. I thought it was a good deal, and I took the early Christmas gift from the market. However, I came to this decision because of the current allocations of my portfolio.
I think National Bank of Canada and Enbridge are good deals today, too.
Did you do any Christmas shopping for dividend stocks lately? If yes, feel free to share in the comments below.
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Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.
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