Dividend stocks are a great way to arm your portfolio with some versatility, as not only can you benefit from capital appreciation, but you can also generate some recurring income on top of those returns. And when those stocks go on sale, the potential to earn a great return is even better.
For that reason, I’ve highlighted three stocks below that are paying shareholders up to 5.4% per year and that have been declining recently that could be great buys to hold for the long term.
Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is a solid stock, but it’s one that has been declining in 2018. Since the start of the year, Scotiabank’s share price has dropped by 12%, and it is currently trading near its low for the year.
For dividend investors, this could be a great time to jump on the stock, as it recently hiked its payouts and, combined with the drop in price, it is now paying an annual yield of 4.8%. That’s a very strong payout for a stock that can offer a lot of stability and long-term growth.
Over the past decade, Scotiabank’s stock has increased by around 80%, and its focus on emerging markets in Latin America gives it the growth potential that might otherwise be missed by investing in other bank stocks.
Leon’s Furniture (TSX:LNF) might not offer as attractive a yield as Scotiabank does, but it’s still a very appealing buy with the stock trading at around 11 times earnings and just 1.6 times book value, making it a good value buy.
Year to date, the stock has declined by 9%, and it too is trading right around its 52-week low. It also increased its dividend recently and currently will provide a yield of 3.3% for investors.
Investing in a company that sells furniture may be unexciting, but it can offer stability and steady growth over the years. As the population grows and as people buy new homes, the demand for furniture will always be there.
The simplicity of the business model makes it an attractive long-term buy, because you can see it’s not going to fall out of favour anytime soon.
Sienna Senior Living (TSX:SIA) offers investors the highest yield on this list, paying more than 5.4% after a recent hike in payouts combined with a drop in price have pushed its payout percentage up.
Year to date, Sienna’s stock price has declined by 8%, but over the long term I see a lot of growth potential for the company. Its focus on senior living and care facilities makes Sienna a good and strategic investment, particularly as the population in Canada continues to age and as the demographics start to shift.
Demand for senior living is going to be high in the years to come, and with many properties in Ontario and British Columbia, Sienna will stand to benefit from that.
The stock is a good long-term play for investors that are willing to be patient. However, a monthly dividend will certainly help compensate you for your time.
Fool contributor David Jagielski has no position in any of the stocks mentioned.