Divendend Stock Ideas in May 2026 that could be Undevalued

Infrastructure is experiencing a resurgence, and Brookfield Asset Management offers a diversified way to invest in this sector. Brookfield is one of the world’s largest alternative asset managers, investing in infrastructure, renewable power, real estate, and private equity. The company’s assets under management have reached $1.2 trillion, with fee-bearing capital increasing 12% year over year to $613.8 billion in the first quarter of 2026. Brookfield’s valuation looks attractive, trading at 31 times earnings, down 25% from its 52-week highs. The company also offers a 4.1% dividend yield.

Brookfield’s diversified portfolio and scale give it access to smaller firms that competitors cannot touch. The company’s future prospects are promising, driven by the growing need for infrastructure, including AI infrastructure, power, and data centers. If interest rates remain steady or decline, private assets become more attractive, supporting deal activity and improving valuations across real estate and infrastructure.

Overall, Brookfield Asset Management appears to be a solid blue-chip investment opportunity, with a discounted valuation and attractive dividend yield. The company’s diversified portfolio and scale position it to benefit from the expanding infrastructure sector.

Pet Valu Holdings, Canada’s largest pet specialty retailer, is a top Canadian stock pick despite being down 53% from its all-time highs. The company operates 863 stores across Canada and sells a wide range of pet products. Pet Valu has sharpened its everyday pricing on key products, especially through its proprietary brands, which generate higher margins than national brands.

In 2025, Pet Valu grew sales by 5% and maintained adjusted EBITDA margins at 22%. The company also returned a record $121 million to shareholders through share buybacks and dividends. Same-store sales growth was modest at 0.3% in Q4, but units per transaction reached a multi-year high, and loyalty program penetration hit an all-time high of 88%.

Pet Valu completed a major supply chain transformation in 2025, increasing throughput per labour hour by 60%. The company plans to open around 40 new stores in 2026 and continue to grow its franchise network. Management is guiding for revenue growth of 2% to 4% and adjusted earnings per share growth of mid- to high-single digits.

Analysts forecast Pet Valu to expand its free cash flow from $104 million in 2025 to almost $200 million in 2030. If the stock is priced at 10 times forward FCF, it could return 62% within the next four years. The company’s fortress balance sheet, growing free cash flow, and shareholder-friendly capital allocation strategy make it an attractive investment opportunity.

Cogeco Communications, a telecom company listed on the Toronto Stock Exchange, is currently offering a 6.3% dividend yield. Despite a recent 18% decline in its stock price, the company continues to invest in fibre expansion, wireless growth, and operational efficiency initiatives. In its latest quarter, Cogeco reported a 5.3% year-over-year decline in revenue, mainly due to weakness in its American telecommunications segment. However, its Canadian operations showed resilience with 0.9% year-over-year revenue growth.

The company’s adjusted net profit improved by 4.2% year-over-year to $79.8 million, driven by lower depreciation expenses, reduced financing costs, and improved operational efficiency. Free cash flow also increased by 35.5% year-over-year due to lower capital spending and reduced income taxes. As a result, Cogeco raised its quarterly dividend by 7%, indicating confidence in its long-term cash flow outlook.

Cogeco’s long-term strategy focuses on expanding its network footprint, improving operating efficiency, and growing customer relationships in both Canada and the United States. The company’s investments in fibre infrastructure and wireless services are expected to support future revenue growth, while cost-reduction efforts may continue to improve profitability.

For long-term investors, Cogeco’s 6.3% dividend yield, improving free cash flow, and expected operational recovery make it an attractive TSX dividend stock to buy at today’s valuation.

Manulife Financial is a Canadian insurer with a diverse business model that extends beyond insurance into wealth and asset management. The company has a broad reach, with operations in multiple markets, including Asia, where it has built a growing presence through partnerships and direct distribution. Manulife’s business model provides a defensive appeal, with multiple revenue streams that can help support its dividend over time.

The company’s scale is a significant advantage, allowing it to spread costs across a large customer base and invest its float more efficiently. Manulife’s dividend yield is currently 3.5%, and the company has a history of providing annual bumps to its dividend. The dividend is supported by the company’s diversified business model, making it an attractive option for long-term investors seeking income and stability.

Manulife is considered an undervalued dividend stock, with a solid business model that offers long-term growth potential. The company’s insurance business is often overlooked by the market, but it provides steady earnings, generates strong cash flow, and builds long-term value. Overall, Manulife is a compelling addition to a well-diversified portfolio.