Dividend investing is a popular long-term investment strategy utilized by both professional investors and everyday people. The highest goal for dividend investors is to find cheap stocks with high upside potential so that investors can reap the benefits of both capital appreciation as well as consistent dividend income.
Inexpensive stocks offer a variety of benefits as well as risks. On the upside, it allows investors to purchase more shares. You will agree that when companies like Alibaba Group or Amazon buy thousands of shares, they obtain more return on investment than a private individual that can only afford one or two. After all, whether you buy a stock worth $1 or $100, if any of the stock increases by let’s say 10%, so will your dividend. That’s why experts recommend buying as many as possible once you trust the product or service so you can begin receiving dividends. The more shares an investor buys, the higher the dividend yield. However, investors should be wary of these types of stocks because the stock market is not predictable. The cheaper the stock, typically the more volatile it can be, and payouts might be less guaranteed especially if the company is newer.
You will get loads of long-term or short-term investment opportunities and information about the stock market from our website by simply subscribing to any of our media outlets. With that said, this article will show you the best dividend stocks under $10 in Canada.
What are the best Canadian stocks under $10?
Below is a list of the top dividend stocks in Canada trading under $10. Note that the writer or website has no direct access to or affiliation with any of these businesses. The posts you see on our site represent our opinion and our opinion only.
Freehold Royalties (TSX:FRU)
Starting off the list is Freehold Royalties. The company operates in the energy sector and is a hot commodity in the stock market given that the energy industry is booming at the moment.
Although energy stocks were among the last Canadian stocks to bounce back from the pandemic, the recent rise in crude oil prices has boosted the energy sector and investors are reaping their rewards massively.
The company’s earnings derive from a high-netback portfolio of mineral titles and royalties on oil and gas properties across Western Canada.
In the last couple of years, the stock has been undervalued to the point that the company had to cut down its dividends to retain some cash. However, the stock has bounced back and has upped its dividend twice by 100% since November.
With a market cap of $850.15M and a dividend yield that stands at 4.56% as of today, there is no better time for investors to take their chances on this stock than now. The current share price is C$8.46 and has been in a steady uptrend for over a year with no signs of slowing down.
Mullen Group – TSX:MTL
Mullen is one of the biggest Canadian logistics and trucking firms that services the oil and gas sector with a core focus on natural gas. The company covers many areas in the U.S and Canada with a wide range of services including truckload freight, drilling, and well services.
The diverse services rendered by the company guarantee a wide customer base and thus have been a major point of attraction for most investors and partners.
The logistics sector was very reliable during the lockdown. So it’s not surprising how relevance manifested in the high dividend yield enjoyed by early investors who bought dividend stocks during the selloffs in March 2020.
Based on recent case studies and forecasts, companies that deal in natural gas are expected to surge between the second and last quarter of 2021.
As at the time of writing this content, a report data quotes that natural gas prices have increased by another 2% and are higher by 7.3% for the week. Thus, early investors are already reaping the rewards of these stocks.
But it’s not too late to buy a share in Mullen Group even as the current stock price stands at C$13.44, with a market cap of $1.299B. More growth is expected to take place later this year in the entire oil and gas sector, with more emphasis on petroleum products (especially natural gas).
Corus Entertainment (TSX:CJR.B)
Corus Entertainment is another under $10 Canadian dividend stock you should definitely look into. As the name suggests, the company is into media and entertainment and owns the rights to several strong brands including Disney Channel Canada, YTV, Global News, National Geographic, and many more household names. Even with its enormous market cap, Corus has been one of the cheapest Canadian stocks in 2020.
The stock recently has been starting to pick up steam. Although the company has seen a 100% growth from its initial slump in 2020, it has risen since to its current share price of C$5.98.
Moreover, a report data holds that analysts predict Corus to amass $0.83 per share in earnings (for the 2021 fiscal year) — a whopping sum compared to many other stocks in the market. This prediction simply means that the expected forward Price-to-Earnings ratio is 6.9.
Sounds pretty cheap, right?
But there is even more value to look up to as the firm currently has a market cap of $1.229B. Corus also pays dividends that yield up to 4.2%. All in all, this is a solid long-term buy offering high yields and room for growth.
B2Gold – TSX:BTO
B2Gold is a medium-scale gold producer that operates in 5 countries, namely Mali, Nicaragua, Namibia, the Philippines, and Burkina Faso.
It’s understandable that many investors might shy away from this stock considering the stability of some of these regions is up in the air. After all, with lots of other Canadian gold stocks to invest in, it would make more sense to stay local if you want to play it ultra safe. That said, it would be a mistake totally right off B2Gold for these reasons.
In the last 5 years, the company has proven its worth and has shown dividend returns of over 500%, which vastly outweighs the TSX index return of just 24.9% by a huge margin.
The stock sells at just C$6.40 per share, as of the time of writing this piece. But that’s not all–this cheap dividend stock trades below the industry average. The forward Price-to-Sales of 2.97, Price-to-Book of 1.92, and Price-to-Cash Flow of 7.20 shows how below average this stock sells for when compared to other gold stocks/ETFs that stand at 30.
The year 2020 saw the dividends of this stock double. And this year (2021), the chart is tilting in the same direction as the ROI is already at 24.7%. Don’t miss out on this stock—consider adding it to your portfolio today!
Canaccord Genuity Group – TSX:CF
This full-service company offers financial services with specializing in wealth management and capital markets, serving both private individuals and organizations.
The growth record of the company has been impressive over the last half-decade standing at 8.5% annually. The earning range has also been steady between 40-50%. Not many financial firms can beat these outstanding results.
Despite record growth, the stock still comes in at a very cheap price and sells for just $9.74 (C$12.54) per share as of today.
Moreover, Canaccord is valued below the industry average as it has a Price-to-Earnings ratio of 10.2, Price-to-Sales of 0.71, and Price-to-Book of 1.52. It has also outperformed the TSX index over the last 5 years by over 13%, and according to our technical analysis is currently sitting in oversold territory, meaning that an upward trend is highly likely.
The quarterly dividend right now is $0.057 (C$0.070) which is far less than what the company paid last year ($0.12) before thepandemic-stricken financial stock market. However, it will be quite interesting to see what the post-pandemic market will offer this stock by the end of this year.
Peyto Exploration and Development (TSX:PEY)
Another Canadian dividend stock under $10 on this list is Peyto Exploration and Development. This energy-related stock has shown a lot of promise since it’s tied mainly to natural gas.
Based on experience, we know that Canadian natural gas companies are flourishing at the moment and so are some of the best energy stocks to invest in.
The world is shifting towards a more environmentally sustainable economy, which makes natural gas a much more preferred option compared to crude oil or coal. Thus the demand for natural gas has been steadily rising and will continue to rise for decades to come.
What’s so great about Peyto Exploration and Development is that they are able to produce natural gas much cheaper than their competition, which not only allows for higher profit margins but also protects their revenue during times when the price of natural gas falls.
Moreover, it ensures that the company’s profit margin skyrockets when the stock or share price starts going up. This, of course, is why this stock stands out amongst its competitors.
This stock currently trades for the low price of C$5.58. Make sure you get in early on this one before other investors start seeing its potential and begin jumping in.
Frequently asked questions
Below are a list of frequently asked questions regarding Canadian dividend stocks.
What are the top 10 dividend-paying stocks in Canada?
- Transalta Renewables (RNW.TO)
- Emera Incorporated (EMA.TO)
- National Bank of Canada (NA.TO)
- BCE Inc (BCE.TO)
- Power Corporation of Canada (POW.TO)
- Exco Technologies Limited (XTC.TO)
- Canadian Natural Resources Limited (CNQ.TO)
- Methanex Corporation (MX.TO)
- Power Financial Corporation (PWF.TO)
- Great-West Lifeco Inc. (GWO.TO)
Which Canadian bank is the best investment?
- TD Bank.
- Royal Bank.
- Bank of Montreal
- National Bank.
- Scotia Bank
What are the best Canadian dividend stocks?
All the companies listed above provide amazing offers in dividend stocks that anyone who hopes to get real long-term value should venture into. Note that just because a company is doing well doesn’t mean that each of its subsidiaries will perform well.
Before you go
There are cheap (under $10) stocks that promise lots of dividends in Canada, the U.S, or anywhere else in the world. However, your portfolio of investments can easily go to waste if you don’t properly consider simple things like understanding the company’s product offerings, current value, the potential for success, and so forth.
As a dividend investor, you have to focus more on the dividend yield rather than the stock price.
Nevertheless, if your budget for Canadian dividend stocks is under $10, you can’t go wrong with any of the options above.
If these dividend stocks do not seem to be the best fit for you, be sure to look out for our article that covers Canadian cobalt stocks.