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The recent downturn in the market may remind investors of the violent correction that hit stocks in February and March 2020. At that time, there were fears that the COVID-19 pandemic could lead to a deep and prolonged bear market. Investors who took advantage of this opportunity were rewarded over the next two years. Canadians should remember this correction and look to similarly benefit in 2022.
Today, I want to take a look at three high-yield stocks that are worth hoarding in this climate.
Here is a highly diversified stock to hold in the face of a down market
Great-West Lifeco (TSX: GWO) is the first dividend stock I’m looking to grab in this market downturn. This Winnipeg-based company operates in the life and health insurance, and financial services business of North America and Europe. Those dividend stocks are down 11% in 2022 as of the close on May 20, sending the stock into negative territory in the same period last year.
This company released its results for the first quarter of 2022 on May 4th. Great-West reported total profit of $809 million — up from $739 million the year before. Meanwhile, volatile stock markets led to a marginal drop in total assets under management (AUA) to $2.2 trillion.
These dividend stocks have a favorable price-to-earnings (P/E) ratio of 9.7. It offers a quarterly dividend of $0.49 per share. This represents a very strong return of 5.8%.
High yield dividend stock provides exposure to the green energy space
The market downturn should also motivate investors to buy dividend stocks such as Algonquin Energy & Utilities (TSX: AQN) (NYSE: AQN). This Oakville-based company owns and operates a portfolio of regulated and unregulated generation, distribution, and transmission facility assets in North and South America. Utility stocks have proven reliable in the face of market turmoil. Algonquin shares are up 1.9% so far in 2022.
In the first quarter of 2022, the company recorded revenue growth of 16% to $735 million. The company reported adjusted net earnings of $141 million, or $0.21 per share — up 13% and 5%, respectively, from the previous year. Meanwhile, adjusted EBITDA increased 17% to $330 million.
This dividend stock is trading in an area of favorable value compared to its industry peers. Algonquin last paid a quarterly dividend of $0.181 per share, representing a solid 5.1% return.
Why am I targeting this dividend stock in the restaurant business
Brands International Restaurant (TSX: QSR) (NYSE: QSR) is a Toronto-based quick-service restaurant company that owns and operates top brands such as Burger King, Tim Hortons and Bob’s Louisiana Chicken. Last summer, I had suggested that Canadian investors jump back into the restaurant space as the country reopens. Its shares are down 13% so far in 2022.
Investors received RBI’s first-quarter 2022 dividend on May 3. Total revenue increased to $1.45 billion compared to $1.26 billion in the previous year. Meanwhile, adjusted EBITDA was reported at $530 million – up from $480 million in the first quarter of 2021. This earnings stock recently had a RSI of 29, putting the Reserve Bank of India in a zone Technically oversold. It offers a quarterly dividend of $0.54 per share. This represents a return of 4.3%.