Dividend shares are a must for every balanced portfolio, because these companies offer consistent payouts and stabilize your portfolio. Given their regular payments, these companies are less susceptible to broader market fluctuations. In addition, investors can re -invest this regular dividend payment to achieve superior returns. In the meantime, dividend shares have also performed historically better than non-dividend payment shares.
Let us look at this background at three undervalued dividend shares that investors with a longer horizon can now buy.
Canadian natural resources
Canadian natural resources (TSX: CNQ) is an oil and natural gas producer that operates a diversified and balanced asset base. The effective and efficient activities, large, low risk and high-quality reserves and lower capital investment have led to a lower break life oil price. That is why the company enjoys healthy cash flows and has consistently increased its dividend. In the past 25 years, the company has continued its dividends continuously with an annual rate of 21% and is currently offering a juicy progressive dividend yield of 5.36%.
Furthermore, the energy company established in Calgary has the largest crude oil and natural gas reserves in Canada, with a total proven reserve life index of 32 years. In addition, the significant portfolio of these reserves is SCO (synthetic crude oil), light crude oil and NGLs (natural gas fluids). Moreover, the company continues to strengthen its production possibilities through capital investments and this year is planning to invest more than $ 6 billion.
In the meantime, analysts predict the disruptions because of the Russia-Ukraine war and geopolitical tensions in the Middle East to support oil prices this year, which could benefit the oil-producing companies, such as CNQ, to the oil-producing companies. Together with these favorable factors, the solid financial position of CNQ and healthy cash flows would enable to continue to pay dividends at a healthier rate. In the meantime, the company currently acts approximately 16% discount compared to its 52 weeks high, while its NTM (next-12h-months) price-to-win is several more at 14.4, making it an excellent long-term purchase.
Telus
After a challenging a few years, Telus (TSX: T) this year witnessed Healthy Buying, with his share price with 18.7%. Healthy quarterly performance and lower interest rates have improved the sentiments of investors, thereby supporting the growth of the stock price. Despite the recent increases, it is still traded by more than 35% lower compared to its 2022 highlights. His NTM Price-Sales Multiple is also on an attractive 1.6.
Given their recurring income flows, telecommunication companies, including Telus, enjoy healthy cash flows, allowing them to consistently pay dividends. Telus has raised his dividends 28 times since May 2011, while the forward dividend yield is on a juicy 7.46%.
Moreover, the demand for telecommunication services continues to rise in the midst of the digitization of companies, growth in work and learning remotely and an increased use of artificial intelligence. In the midst of the growing addressable market, Telus is planning to invest $ 70 billion in the coming five years to strengthen its network infrastructure. The other growth segments, Telus Health and Telus Agriculture and consumer goods, are also witnessed by healthy growth. Given all these factors, I believe that Telus could continue to pay a healthier rate dividends.
Northland Power
Northland Power (TSX: NPI) is another dividend share that looks attractive at these levels, in which the company trades 15.1 times the projected income of analysts for the next four quarters. The energy company based in Toronto has a diverse portfolio of clean energy assets with a total power -producing capacity of 3.4 Gigawatt. The company earns approximately 90% of its turnover and sells the electricity generated from its facilities through long-term PPAs (Power-Purchse Agreements). The weighted average lifespan of these similarities is 15 years. Protecting these agreements are financial data at price fluctuations, which provides income and cash flow stability. In the midst of these healthy cash flows, the company currently offers a monthly dividend payment of $ 0.10/share, which translates into a progressive dividend yield of 5.3%.
Moreover, NPI has 2,2 gigawatts of power -producing facilities under construction, which would become operational in the coming years. In the midst of these growth initiatives, the company expects that its adapted income will grow before interest, taxes, depreciation and amortization with an annual rate of 7-10% to 2027. The company could also benefit from the increased transition to clean energy.
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