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yield hog

John Heinzl is the dividend investor for Globe Investor's Strategy Lab. Follow his contributions here. You can see his model portfolio here.

When I buy things at the store, I like to get them on sale.

The same goes for my investments.

One of my favourite strategies as a dividend investor is to buy good companies when their share prices have hit a rough patch. Maybe the market in general is in a funk, or the company missed earnings estimates by a penny or two. As long as nothing has fundamentally changed in the company's outlook, buying a great stock when it's cheap – or at least cheaper than it was – is a sensible approach to building wealth.

Which brings us to today's topic.

Stock markets have been on a roll for much of 2016, making it harder to find dividend-paying companies trading at attractive valuations. But in recent weeks many dividend stocks have dropped in price. One factor, I suspect, is a modest uptick in bond yields that has caused interest-sensitive sectors, in particular, to weaken.

Here are four dividend stocks that have fallen from their 52-week highs by anywhere from 4 per cent to 9 per cent. That alone doesn't necessarily make them "buys" or guarantee that they won't fall further, of course, but in general, acquiring high-quality dividend stocks when they're on sale can be a profitable investing strategy. Think of this list as a starting point for further research, and be sure to do your own due diligence before investing in any security.

Algonquin Power & Utilities (AQN-TSX)

Price: $11.74
Yield: 4.8 per cent

Algonquin Power & Utilities offers a nice combination of offence and defence. Its regulated utilities and contracted power assets generate reliable earnings, and those earnings are growing thanks to a string of acquisitions. The company's biggest deal yet – the $3.4-billion acquisition of Empire District Electric Co. of Joplin, Mo. – moved a step closer to completion this month with the approval of the Missouri Public Service Commission. Citing the "strong likelihood for continued annual dividend increases," Desjardins Capital Markets analyst Bill Cabel recently hiked his price target to $15.25 from $14.25 and reiterated his "buy" rating on the shares.

Sun Life Financial (SLF-TSX)

Price: $42.16
Yield: 3.8 per cent

Sun Life Financial had the best earnings growth among Canadian life insurers from 2012-15, but sluggish 2016 results have taken a toll on the stock, CIBC World Markets analyst Paul Holden said in a note. Still, he rates the shares "sector outperformer," citing above-average growth prospects, lower-than-average risk, strong management execution and an "attractive" price-to-book ratio of 1.3. "SLF is producing the best sales growth in Canadian retail insurance, is growing profitably in Asia and has already taken action to mitigate risks and drags associated with less attractive books of business," Mr. Holden said.

Brookfield Renewable Partners (BEP.UN – TSX)

Price: $39.85
Yield: 5.9 per cent

Brookfield Renewable's portfolio of mainly hydroelectric generating facilities spans North America, South America and Europe and is 90-per-cent contracted, with an average weighted contract life of 16 years. The juicy yield looks even more attractive considering that the company aims to increase distributions by 5 per cent to 9 per cent annually. "We see BEP as a core holding in the Canadian [independent power producer] space due to its scale, quality portfolio of assets, and sponsorship from Brookfield Asset Management," CIBC World Markets analyst Robert Catellier said in a recent note in which he initiated coverage with a "sector outperformer" rating. Using discounted cash flow analysis, Mr. Catellier has a 12- to 18-month price target of $44.

Canadian REIT (REF.UN-TSX)

Price: $47.91
Yield: 3.8 per cent

Widely viewed as one of Canada's highest-quality real estate investment trusts, Canadian REIT owns an interest in 197 retail, industrial and office properties comprising 25 million square feet of space across Canada. Thanks to its growing portfolio, it has paid higher distributions for 15 consecutive years, with the most recent hike – of 1.7 per cent – announced in May. Canadian REIT also has one of the lowest payout ratios in the industry – just 67 per cent of adjusted funds from operations were paid out in the first six months of 2016 – which means the distribution is well protected and the company has lots of cash to reinvest internally. Although the units have been hurt by the downturn in Calgary's office market, over the long term I expect the distribution and unit price will continue growing.

Disclosure: the author personally owns shares of AQN, BEP.UN and REF.UN