If you’re looking for a good dividend stock, you may not want to look much further than Laurentian Bank of Canada (TSX:LB). The bank stock isn’t one of the big names on the TSX, but that doesn’t mean it can’t be a good buy.
It offers investors a lot of value as it is trading well below its book value, at a multiple of just 0.7. Its price-to-earnings multiple of seven is also well below what the big banks trade at, which is normally at least 10 times earnings.
The stock has tanked heavily in 2018, dropping around 35% of its value, which appears to be excessive and makes it a good candidate to rebound in 2019. The one positive from this: its dividend yield has climbed to just under 7%.
If you’re concerned the dividend might be a bit high, the company certainly isn’t as it recently raised its quarterly payouts. In five years, Laurentian’s dividend payments have grown by more than 27%, for a compounded annual growth rate of 5%. That’s well above inflation and means you’ll be earning more on your initial investment years from now, and all you’ll have to do is just hold on to the stock.
Although Laurentian is not a big or popular stock by any means, it has a good mix of value and dividends that many investors will likely appreciate. The bank has also had no problem turning a profit and it offers investors a great deal of consistency from one period to the next. It could be a solid pickup for 2019 as it’s a stock that could generate significant returns next year.
