Six dividend stocks with rate-cut tailwinds

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Bond proxies such as real estate investment trusts are recovering, and falling rates can help other dividend payers, too

Tim Hortons parent company Restaurant Brands International is one dividend stock that could benefit from lower interest rates, as consumers have more disposable income.Canadian dividend stocks that may have struggled when interest rates were rising now have the wind at their backs.

“We think there is still 8 per cent upside with almost a 7-per-cent yield , so a 15-per-cent total return is ideal for my playbook,” he says. Enbridge trades around 11 times enterprise value to earnings before interest, taxes, depreciation and amortization . “We think it should trade at 12 to 13 times ,” Mr. Lauzon says.Mr. Lauzon says Chartwell Retirement Residences REIT will benefit from falling interest rates, which will reduce refinancing costs for its debt load.

He says the risks range from another serious virus affecting occupancy and a recession causing people to stay in their homes longer.Restaurant Brands is a compelling play because its key brands – Tim Hortons, Burger King and Popeyes Louisiana Kitchen – are still growing market share in a tough economy, Mr. Mahairhu says.

He says shares of Restaurant Brands are attractive, trading at around 19.2 times forward earnings, versus its five-year median valuation of 21.6 times. Its stock also trades at a discount to its peer group.This digital financial services company is an appealing investment because of its fast-growing Equitable Bank and diversification in its offerings, Mr. Mahairhu says.

Toronto-based Jamieson Wellness sells products under six different brands, including Jamieson, Iron Vegan and Youtheory. The latter was acquired as part of a U.S. acquisition in 2022. Jamieson gets 53 per cent of sales from Canada and 26 per cent from the U.S. A risk for this stock is a recession, or the potential loss of a major customer, such as a drugstore chain.

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