1 Incredible TSX Dividend Stock to Buy While it’s Down 55%

When a TSX dividend stock drops hard, you want to know whether the market just offered you a deal or a warning label. A good “buy while it’s down” name keeps paying you to wait, and it owns assets people still need in a slowdown. It also shows a credible plan to protect the dividend, repair the balance sheet, and grow cash flow again. Price declines feel awful, but they can create your best entry when the business stays intact, and the fear looks bigger than the facts.

AQN

Algonquin Power & Utilities (TSX:AQN) sits in that “essential” category, running regulated electric, gas, and water utilities, plus renewable power assets. Think of it as a blend of steady rate-base infrastructure and long-life generation. That mix can produce predictable cash flow when management keeps debt under control and regulators keep approving capital plans.

Algonquin pushed its reset toward a simpler story. It appointed a new chief operating officer in early January 2026, which signalled a sharper operational focus. It also kept the dividend steady at $0.37 after a big cut in 2024, and that choice told investors it wanted stability more than bravado. The dividend stock now sells itself as a more disciplined utility operator that earns trust one quarter at a time.

The share price still reflects bruises from the past few years. Shares are still down by about 55% in since the drop in the dividend. However, since then, it’s been recovering slowly, but surely. In fact, in the last year alone, shares are up 32%! That just goes to show investors that patience pays.

Earnings support

Earnings show why the dividend stock attracts bargain hunters, and why it still divides opinion. In the first quarter of 2025, Algonquin delivered adjusted net earnings of US$111.6 million, or US$0.14 per share, up from US$0.11 per share a year earlier. That result hinted that the clean-up plan could work, even with higher rates and higher scrutiny.

Then, the middle of the year reminded investors that utilities still face bumps. In the second quarter of 2025, adjusted net earnings fell to US$36.2 million, and adjusted earnings per share (EPS) slid to US$0.04, down from US$0.06 in the prior-year quarter.

By the third quarter of 2025, the picture improved again. Algonquin reported adjusted net earnings of US$71.7 million and adjusted EPS of US$0.09, up from US$0.08 in the year-ago quarter. Investors should watch this rhythm: steady regulatory wins can smooth out the noise that markets and weather create.

Bottom line

Looking forward, the bull case rests on execution and a calmer balance sheet. If Algonquin keeps shrinking complexity, invests where regulators reward it, and avoids surprise write-downs, it can rebuild credibility. Valuation already reflects skepticism, which can help buyers who tolerate patience. Today, the dividend stock trades at 93 times earnings, so still on the high side, and with a 4% yield. Those numbers do not guarantee safety, but investors can still earn major income from even $7,000.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTDFN$9.28754$0.37$278.98Monthly$6,997.12

The risk stays obvious, so you should keep your eyes open. Patience often pays in this sector. Debt and interest costs can still bite, and a weak rate case can pressure returns. Renewables can add merchant-price risk, and utilities can suffer when storms and outages spike costs. Still, if you want one TSX dividend stock to buy while it’s down, Algonquin offers a rare mix of essential assets, a reset strategy, and a dividend that now looks more realistic. Buy it for the next decade, not the next headline.

The post 1 Incredible TSX Dividend Stock to Buy While it’s Down 55% appeared first on The Motley Fool Canada.

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More reading

• Build a Passive-Income Portfolio With Just $25,000
• Is Algonquin Power Stock a Trap?
• Is Algonquin Power More Like a Trap Than an Investment?
• 1 Magnificent Canadian Stock Down 59% to Buy and Hold Forever
• 3 Ways Canadians Can Invest Like ‘The Canadian Warren Buffett’

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.