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Dividend Investors: 2 Oversold Canadian Stocks With Great Yields

Dollar symbol and Canadian flag on keyboard
Image source: Getty Images

Written by Chris MacDonald at The Motley Fool Canada

For dividend investors, buying stocks which provide sustainable payouts in the long run is essential. However, to make the investment worthwhile, they must either buy when they have taken a dip or are being oversold.

That way, they can benefit from higher capital appreciation when the stock prices rise back to their actual values. In this vein, here are two oversold Canadian stocks with fantastic yields.

SmartCentres REIT

SmartCentres REIT (TSX:SRU.UN) is one of the biggest fully integrated real estate investment trusts (REITs) in Canada. Its portfolio consists of around 34.9 million square feet of value-generating office and retail spaces, along with assets worth US$11.8 billion.

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A unique thing about this dividend stock is that it issues payouts to its unitholders on a monthly basis. For October, this REIT declared a payment of US$0.15417 per unit. This amounts to US$1.85 per unit annually.

Furthermore, SmartCentres had an excellent financial performance in the second quarter (Q2) of 2023. Its shopping centre leasing activity increased from Q1 2023 and achieved a 98.2% occupancy rate. It also executed new leases of around 273,150 square feet and renewed 75.5% of the 5,157,636 square feet of leased space, which is expiring in 2023.

There was a 3.2% increase in its same-property net operating income from last year’s same quarter, amounting to US$4.2 million. The REIT also reported a net rental income growth of 3.7% or US$4.6 million from last year.

Fortis

Fortis (TSX:FTS) is a Canadian multinational gas and electricity utility operator. For the current quarter, this company will be issuing a dividend payment of $0.59 per common share. This indicates a 4.4% increase from last year, marking 50 years of consecutive dividend increases by the company.

This dividend will be payable on Dec. 1 to shareholders of record on Nov. 16. Currently, Fortis’s payout ratio sits at 73.01%, and its dividend yield is 4%, slightly higher than the 2.992% sectorial average.

Moreover, Fortis has reported excellent profits in Q3 2023 reports. Its profits increased to US$394 million from last year’s US$326 million, while revenue figures rose to US$2.72 billion from Q3 2022’s US$2.55 billion.

Apart from this, Fortis has completed the sale of its British Columbian Aitken Creek Natural Gas Storage Facilities. This includes the Aitken Creek North Gas Storage Facility (100% interest) and the Aitken Creek Natural Gas Storage Facility (93.8% interest).

This move will help strengthen the company’s balance sheet and provide funding for growing its regulated utilities business.

The post Dividend Investors: 2 Oversold Canadian Stocks With Great Yields appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Fortis?

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Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in November 2023... and Fortis wasn't on the list.

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Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Fortis and SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

2023