Business & Investment

2021: Three Undervalued Dividend Aristocrats to Buy Now

If you like dividends, don’t miss the dividend aristocrats who trade cheaper than their peers and offer high yields. Here are three Canadian shares that have been undervalued and have consistently increased shareholder returns through increased dividends.In addition, these TSX-Listed companies generate resilient cash flow and may continue to increase dividends.

Penbina pipeline

Penbina pipeline (TSX: PPL)(NYSE: PBA) We have paid dividends since 1998 and have grown at a compound annual growth rate (CAGR) of 4.2% over the last decade.Robust company Dividend payment It is backed by a variety of low-risk businesses that are highly contracted and generate strong fee-based cash flow.

The COVID-19 pandemic hit energy companies in 2020, but Penvina maintained dividends, reflecting the power of its basic business. As demand is expected to recover, Penvina’s top and bottom lines may improve in 2021 to support its payments. The company expects overall product sales to improve in 2021 and is on track to provide solid fee-based cash flow.

What’s more, Penvina shares are traded cheaper than their peers. It is trading at 10.5, which is a multiple of EV / EBITDA for the next 12 months (NTM). This reflects a discount of about 11% from the average of other companies in the same industry.Also, when compared, it is traded at a discount of about 14% Embridge stock.

The pipeline company pays a monthly dividend of $ 0.21 per share, reflecting a high yield of 7.0% at current price levels.

Bank of Montreal

The banking giant has paid dividends for 192 years, the best of any Canadian company. Meanwhile, in the last 15 years Bank of Montreal (TSX: BMO)(NYSE: BMO) That is increasing dividend With a CAGR of 6%.

Banks returned to the black and performed strongly in the fourth quarter. Revenues improved by 5%, reflecting higher loans and deposits and improved efficiency. I believe that 2021 economic activity and rising vaccine distribution are likely to boost credit growth and support Bank of Montreal stocks. In addition, increased efficiency and reduced credit allowances can curb earnings and drive dividends.

The price-to-book value ratio is trading at 1.2. This is lower than its peers and reflects a 20% discount over the peer average of 1.5. Bank of Montreal shares will pay a quarterly dividend of $ 1.06 per share and will be converted to a yield of 4.3%.

Capital power

Capital power (TSX: CPX) We have raised dividends at a CAGR of 7% over the last seven years. In addition, we expect dividends to increase by 7% in 2021, thanks to highly contracted power generation assets. The company’s resilient business, backed by young assets and long-term electricity purchase contracts, is well suited to provide strong cash flow and drive dividends. In addition, a strong pipeline of contracted growth opportunities is a precursor to growth.

Capital Power offers significant discounts compared to other companies in the same industry. It trades in multiples of NTM EV / EBITDA of 8.8 and reflects a discount of approximately 28% compared to the peer group’s average of 12.3. In addition, it offers a high yield of 5.6% and is extremely safe.

In addition to these dividend aristocrats, see this free report on top undervalue stocks …

Just released! 5 shares under $ 49 (free report)

Motley Fool CanadaThe team that is sweeping the market has released a new free report revealing five “dirt cheap” shares that can be purchased today for less than $ 49 per share.
Our team considers these five stocks to be very undervalued, but more importantly, Canadian investors can quickly make a fortune.
Do not miss it! Just click the link below to get a free copy and find all 5 stocks right now.

Request a free 5 share report now!

Stupid contributor Snehanahata There are no positions in any of the listed stocks. Motley Fool recommends PEMBINA PIPELINE CORPORATION.

2021: Three Undervalued Dividend Aristocrats to Buy Now 2021: Three Undervalued Dividend Aristocrats to Buy Now

Back to top button