The Canadian dividend stocks we’ve found appear most undervalued based on price to earnings as well as price to assets
SmallCapPower | August 4, 2020: Ultra-low interest rates have sent more than a few income investors chasing yield, which has pushed up the valuations of many dividend stocks. Today we have identified three Canadian dividend stocks that appear most undervalued based on their price-to-earnings ratio as well as price to assets.
*Returns are based on closing stock prices as of August 3, 2020
Power Corporation of Canada (TSX:POW) – $23.77
Power Corporation, incorporated in 1925, is an international management and holding company that focuses on financial services in North America, Europe and Asia, with core holdings that include insurance, retirement, wealth management and investment businesses, as well as a portfolio of alternative asset investment platforms. Power Corp owns 100% of Power Financial, 66.9% of Great-West Lifeco (TSX:GWO), 62.1% of IGM Financial (TSX:IGM), 83.9% of Wealthsimple Financial Corp., and 27.8% of Pargesa Holding, which has interests in global industrial and services companies based in Europe. POW stock has a current dividend yield of 7.5%.
- Year-to-Date Return: – 21%
Bank of Nova Scotia (TSX:BNS) – $55.01
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 6.5%.
- Year-to-Date Return: – 18%
Great-West Lifeco Inc. (TSX:GWO) – $23.68
Great-West Lifeco is an international financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses. Great-West operates in Canada, the United States and Europe under the brands Canada Life, Empower Retirement, Putnam Investments, and Irish Life. Great-West Lifeco and its companies have more than $1.5 trillion in consolidated assets under administration as at March 31, 2020, and are members of the Power Corporation group of companies. GWO stock has a current dividend yield of 7.4%.
- Year-to-Date Return: – 22%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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