Buying dividend stocks at a low valuation should not only lead to a decent price increase, but also a great dividend yield. Introducing two cheap Canadian dividend aristocrats that offer yields of 4% or more right now!
Manulife Stock Yield 4.5%
Last year, when the new coronavirus pandemic hit, it was a challenge for businesses. Manulife (TSX: MFC)(NYSE: MFC) Adjusted earnings per share (EPS) fell only 7% and assets under management increased 10% to $ 1.3 trillion, maintaining resilience.
Life insurers were able to sustain dividend growth. Specifically, MFC shares have increased their dividends for the seventh consecutive year, with a five-year dividend increase rate of 11%.
Based on the current quarterly dividend of $ 0.28 per share, this year’s estimated dividend rate is around 35%, which is relatively low compared to historical levels.
Dividend stocks also remain depressed. At the time of writing, it was just under $ 25 per share and the price-earnings ratio (P / E) was about 8.4. This is cheap because the expected EPS growth rate over the next three years is about 6-13% per year. Up to 5 years.
Importantly, the low valuation allows income investors to buy stocks with an initial yield close to 4.5%. This is very attractive given the low interest rate environment. Stocks may also increase their payments over time.
In addition, Manulife generates more than one-third of its revenue from Asia, which has the potential to boost long-term growth. In fact, Manulife began in 2021 and grew the most in the first quarter with 34% new business value in Asia, 1% in Canada and 22% in the United States.
Assuming EPS growth of 7% and target price-earnings ratio of 10, this cheap stock can generate about 14% annual earnings over the next five years.
Stingray Stock Yield 4.1%
Based in Montreal Stingray Group (TSX: RAY.A) is a music, media and technology company that offers a selection of direct sales and business-to-business services. There are approximately 400 million subscribers or users in 160 countries.
Stingray reported its results for the fourth quarter of 2021 this month. Cash flow proxies revenue and adjusted EBITDA decreased by 12% ($ 60.3 million) and 16% ($ 23.6 million), respectively.
However, management said the adjusted EBITDA margin was stable. The company still generates significant cash flow — operating cash flow increased 74% to $ 24.5 million.
During the quarter, the company repurchased and canceled $ 6.8 million worth of shares for approximately $ 7.03 per share. Stocks are trading near that level at the time of writing.
The complete 2021 results give the big picture. Revenue and adjusted EBITDA decreased by 19% ($ 249.5 million) and 3% ($ 114.3 million), respectively.
In particular, the adjusted EBITDA margin improved from 38.5% to 45.8%. Operating cash flow increased 18% to $ 104.2 million and adjusted free cash flow decreased 5% to $ 74.4 million.
During the year, the company repurchased and canceled $ 10.2 million worth of shares for approximately $ 6.67 per share.
Value stock EPS is projected to increase by 5-10% annually over the next few years. Assuming a fair P / E of 10, there is an upside potential of 38%. Waiting also costs money — it brings 4.1%. Dividend increased for 6 consecutive years. Dividends per share for the last 12 months (TTM) are 3.4% higher than in the previous TTM period.
Manulife Stingray stocks are relatively cheap compared to Canada’s best-ever stock market. They also offer a great yield of over 4% for revenue generation in addition to total revenue. Interested investors need to investigate dividend stocks further.
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This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Services or Advisors. We are Motley! Asking investment papers, even our own papers, can help you think critically about your investment and make decisions to be smarter, happier, and richer. As a result, we may publish articles that may not match recommendations, rankings, or other content. ..
Motley Fool owns and recommends a stake in Stingray Group Inc. KayNg owns a stake in Stingray Group Inc.
Get a + 4% dividend from these two cheap stocks
https://www.fool.ca/2021/06/10/get-a-4-dividend-from-these-2-cheap-stocks/ Get a + 4% dividend from these two cheap stocks