Yahoo Finance 1 Oversold Dividend Stock (With a 4.7 Percent Yield) I’m Buying Right Now
Written by Amy Legate-Wolfe at The Motley Fool Canada
I’m going to be honest. There are actually a lot of dividend stocks out there in oversold territory right now. But perhaps none so much as those in or related to the finance sector.
As American banks dropped two weeks ago now, Canadian banks fell along with them. However, this should be seen as a stellar opportunity.
Uh, why?
I know, it might be considered a little strange to buy a company when it’s not doing well. But Canadian banks are far different than their American counterparts. These banks simply don’t have the competition in our country that American banks have. And while that might not be great for the consumer, it is for the investor. And honestly, for the country as a whole.
You’ve heard how American banks went through all those bailouts during recessions, I’m sure. That’s government money being used by taxpayers to help mega-rich banks get back to being mega-rich once again.
Here, in Canada, don’t get me wrong, there are still mega-rich people out there. However, we do not have the insane level of super rich we see down south. Furthermore, while there are bailouts, there are no where near as many as what we see down there as well. And that’s because Canadian banks prepare for moments like these.
Preparation pays
That preparation pays off, and I mean that literally. With Canadian banks creating a diverse set of income streams, rather than focusing their attention on one or two lucrative revenue streams, they provide one thing: safety. They then allocate that revenue to save provisions for loan losses, such as we’re seeing now.
This has allowed Canadian banks to return to pre-fall prices within a year of reaching 52-week lows. That might feel like a long time, but if you’re investing long-term, it’s a blip in your share price. One you also don’t want to miss out on.
This provides you with an opportunity. When banks are trading in oversold territory, buy them. And above them all, I would grab this one while you can.
TD bank
Of all the banks I’d consider buying that are in oversold territory, Toronto Dominion Bank (TSX:TD) is the strongest option for gains, in my book. As of writing, it holds a relative strength index (RSI) at 14. That’s far below the 30 threshold to mark a stock as oversold.
TD stock is well below that because of its exposure to the United States. Yet, it’s this exposure that could see shares recover quickly! TD stock is a lucrative company that continues to expand, both in the U.S. where it’s one of the top 10 banks, but also online and through lucrative deals. This includes wealth and commercial management, as well as credit card partnerships. Both offering immense income.
So, right now, you can pick up TD stock trading down 22% in the last year alone. Further, you can latch on to a dividend yield of 4.74%. That comes out at $3.84 per share on an annual basis, handed out quarterly. And here is the difference between buying now when shares are down for more income, versus at 52-week highs.
COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
TD – down | $77.85 | 130 | $3.84 | $500 | quarterly | $10,119.20 |
TD – highs | $104 | 130 | $3.84 | $500 | quarterly | $13,520 |
As you can see, you save almost $3,500 for the same amount of annual income by investing now! So get in on that deal while you can.
The post 1 Oversold Dividend Stock (With a 4.7 Percent Yield) I’m Buying Right Now appeared first on The Motley Fool Canada.
Should You Invest $1,000 In TD Bank?
Before you consider TD Bank, you'll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in March 2023... and TD Bank wasn't on the list.
The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 22 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks * Returns as of 3/7/23
More reading
Brookfield Asset Management Spin-Off: What Investors Need to Know
Passive Income: 4 Safe Dividend Stocks to Own for the Next 10 Years
Fool contributor Amy Legate-Wolfe has positions in Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
2023