Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

2 Dividend Stock Dips: Should You Buy Them Both?

Stock MarketsOct 27, 2021 08:46
Saved. See Saved Items.
This article has already been saved in your Saved Items
2 Dividend Stock Dips: Should You Buy Them Both?

Investors buy the dips on dividend stocks to get bigger yields for their purchases. Here are a couple of dividend stocks that have dipped recently. Should you buy them both? Let’s explore!

Algonquin Power & Utilities Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) continued with its acquisition strategy by acquiring Kentucky Power and Kentucky Transmission for about US$2.85 billion, which includes the assumption of US$1.22 billion debt. The acquisition aligns with Algonguin’s portfolio of rate-regulated assets.

As the press release described, “Kentucky Power is a state rate-regulated electricity generation, distribution and transmission utility operating within the Commonwealth of Kentucky, serving approximately 228,000 active customer connections and operating under a cost of service framework. Kentucky TransCo is an electricity transmission business operating in the Kentucky portion of the transmission infrastructure that is part of the Pennsylvania – New Jersey – Maryland regional transmission organization. Kentucky Power and Kentucky TransCo are both regulated by the U.S. Federal Energy Regulatory Commission (FERC).”

Algonquin stock is expected to experience a dip today. It’s not so much that the investing community doesn’t like the acquisition, but it’s more about how the company is funding the acquisition. AQN is funding the acquisition with a bought deal equity financing of $800 million. AQN’s new stock issue goes for $18.15 per share, which would be a dip of roughly 2.5% from the Monday market close price. The dip should place the dividend stock at a yield of around 4.7%.

The dividend stock has been in a big consolidation since 2020. The stock currently trades roughly in the middle of the trading range. So, it’s holding up for investors who are looking for a nice dividend. The utility’s “greening the fleet” capabilities are well in line with the trend favouring renewable energy. So, it’ll remain relevant as an investment. It’s up to individual investors if they would take the 4.7% yield now or wait for a yield of at least 5%.

Restaurant Brands Restaurant Brands International (TSX:TSX:QSR)(NYSE:QSR) reported its third-quarter (Q3) results on Monday. Since then, the restaurant stock has dipped about 6.6% on the TSX. At $71.44 per share at writing, the dividend stock is down about 18% from its 52-week high.

Some pundits are attributing the drop in the stock to the company’s lagging revenues. However, the pressure might actually be because COVID-19 pandemic impacts could continue to weigh on its results. Particularly, since the pandemic has been spreading in 2020, Restaurant Brands’s locations around the globe have experienced different levels of impact. Sometimes, they’re forced to temporarily close due to lockdowns. Other times, they may be operating at a limited level via drive-thru, takeout, delivery, reduced dine-in capacity, or restricted hours of operation.

The key highlights from the Q3 results indicate a robust business. They included consolidated system-wide sales growth of 11%, revenue growth of 12%, adjusted EBITDA growth of 8%, and adjusted earnings-per-share growth of 12% versus a year ago. As the dividend stock declines, it has become increasingly more compelling from a valuation standpoint and offers a juicier yield of roughly 3.7%.

Investor takeaway To sum it up, investing is a long-term endeavour. Both dividend stocks are discounted. So, if you have a long-term investment horizon, it’s not a bad time to buy some shares of both Canadian Dividend Aristocrats on the dip if you have excess cash on the sidelines.

The post 2 Dividend Stock Dips: Should You Buy Them Both? appeared first on The Motley Fool Canada.

The Motley Fool recommends Restaurant Brands International Inc. Fool contributor Kay Ng owns shares of Algonquin.

This Article Was First Published on The Motley Fool

2 Dividend Stock Dips: Should You Buy Them Both?

Related Articles

Is Lightspeed (TSX:LSPD) Stock Price Still a Buy?
Is Lightspeed (TSX:LSPD) Stock Price Still a Buy? By The Motley Fool - Dec 05, 2021

Lightspeed Commerce (TSX:TSX:LSPD)(NYSE:LSPD) stock has been in a downward spiral for months. Currently trading for $64, it’s down 59% from its all-time high. The...

Could This Retail Stock Become a Tech Stock?
Could This Retail Stock Become a Tech Stock? By The Motley Fool - Dec 05, 2021

The line between retail and technology has been blurring for years. Nearly everything you can buy in a store is now also available online on the store’s website. This is...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email