The Canadian value stocks on our list appear to be bargains relative to their peers
SmallCapPower | August 14, 2020: Investors who are uncomfortable with the current stock market valuation might want to consider value stocks, especially ones with dividends that pay you well to wait. Today we have identified three of what could be the best Canadian value stocks for investors seeking income.
*Returns are based on closing stock prices as of August 13, 2020
Emera Inc. (TSX:EMA) – $53.38
Emera invests primarily in regulated electricity generation and electricity and gas transmission and distribution with a strategic focus on transformation from high carbon to low carbon energy sources. The Company has investments throughout North America, and in four Caribbean countries. Emera has about $34 billion in assets and generated revenue of more than $6.1 billion in 2019. The Company has experienced some short-term impacts to its business due to COVID-19, but says its “long-term outlook is positive.” EMA stock has a current dividend yield of 4.5%.
- Year-to-Date Return: 1%
TC Energy Corporation (TSX:TRP) – $64.79
TC Energy has a network of natural gas and crude oil pipelines in Canada, the U.S., and Mexico, along with power generation, natural gas fired power plants, and storage facilities. TRP owns 48.4% of the Bruce Power nuclear plant, which supplies about 30% of Ontario’s electrical power. The Company currently has more than $20 billion worth of projects under development. In February 2020, TC Energy increased its dividend by 8%, its 20th consecutive annual increase, and expects annual dividend growth of 8% to 10% in 2021 with 5% to 7% yearly thereafter. TRP investors have enjoyed 14% average annual shareholder returns since 2000. TRP stock has a current dividend yield of 5% and a P/E ratio of about 13.
- Year-to-Date Return: – 1%
Bank of Nova Scotia (TSX:BNS) – $58.18
Scotiabank is one of the Big 5 Canadian banks, with more than $1.2 trillion in assets. BNS is also a leading bank in the Latin American markets of Mexico, Peru, Chile, and Colombia. Scotiabank has increased its earnings per share at a compound annual growth rate (CAGR) of 6% over the past five years, with a 6% dividend CAGR during the same time. BNS stock has a current dividend yield of 6.2% and a P/E ratio under 10.
- Year-to-Date Return: – 13%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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