Business & Investment

Top Discount Stocks: My 3 Picks

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In an environment of high volatility and low interest rates, stocks that pay dividends as a top investment to generate stable income are emerging. In addition, some of the top TSX dividend stocks are still trading at significant discounts and look attractive at current levels. So, if you plan to direct some of your savings to income stocks, this is my top 3 choice.

Scotiabank

The economic expansion that followed the relaxation of the blockade obligation led to a sharp recovery in Canadian bank stocks.in the meantime Scotiabank (TSX: BNS)(NYSE: BNS) We’ve regained all the lost land, but we’re trading discounts compared to our rivals, which makes it look attractive in terms of valuation.

Scotiabank shares are traded at a price-to-book value ratio (P / B) of 1.5 compared to the average of 1.8 for other companies in the same industry. On the other hand, the multiple of the price-earnings ratio of 10.5 is lower than the average of 11.6 of other companies in the same industry.

Scotiabank shares offer a solid dividend yield of 4.6%, in addition to trading at discounted prices, and have been paying dividends consistently since 1833. In addition, Scotiabank is consistently increasing its earnings at a reasonable pace, and Scotiabank pays dividends.

Overall, its low valuation, expected increase in lending and deposits, exposure to high-growth markets, reduced provision for credit losses, and operating leverage. Bullish outlook..

Capital power

Speaking of high quality dividend stocks that are traded cheaply, Capital power (TSX: CPX).. The stock trades incredibly cheaply compared to its peers and offers a solid dividend yield of 5.6%.

Capital Power shares are trading at a forward EV / EBITDA ratio of 7.6. This is about a 39% discount from the average of other companies in the same industry. In addition, its NTM (next 12 months) 17.9 P / E multiple is also lower than historical and peer group averages.

Capital Power owns a variety of renewable energy assets backed by long-term contracts. Its low-risk business and predictable cash flow support higher dividend payments. In particular, Capital Power has increased dividends for the eighth consecutive year. In addition, I remain positive about the outlook and look forward to continuing to increase dividends at a healthy pace. Investors should be aware that payment rates of 45-55% are safe and sustainable in the long run.

Penbina pipeline

If you are looking for a reliable monthly dividend income, Penbina pipeline (TSX: PPL)(NYSE: PBA) Inventory in your portfolio. While volume recovery and rising commodity prices have led to a recovery in Penbina stock, it is trading at a lower valuation multiple, Very high dividend yield..

Shares of Pembina Pipeline are trading at 10.1, which is a multiple of NTM EV / EBITDA, compared to the peer group average of 11.6. Moreover, it is comparable to its historical average.

In particular, Penbina has a rich history of dividend payments and growth. We have paid dividends for over 22 years. Meanwhile, its dividend has increased at an average annual rate of about 5% over the last decade.

Its highly contracted assets and strong fee-based cash flows support its payments. Meanwhile, the company’s new growth projects and strong backlog show that it can continue to grow revenue and thus grow future dividends at a reasonable pace.

Top Discount Stocks: My 3 Picks

https://www.fool.ca/2021/12/21/top-dividend-stocks-on-discount-my-3-picks/ Top Discount Stocks: My 3 Picks

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