One of the best feelings as an investor is finding high-quality Canadian stocks that are cheap and you can buy and hold for the long haul. While any top-notch Canadian stock that's cheap can be ideal, buying dividend stocks while they're undervalued offers some significant advantages.

As dividend stocks sell-off in price, naturally, their dividend yields rise. Therefore, when you buy the stock while it's undervalued, you have a higher potential to earn capital gains, as it eventually rallies back to fair value and continues growing for you.

However, you also lock in a higher dividend yield, which can earn you more passive income throughout the time you own the stock.

Therefore, seizing the opportunity and buying high-quality Canadian dividend stocks while they are cheap is one of the best ways to set yourself up for long-term investing success. Here are three of the top Canadian dividend stocks to buy while they're cheap, each offering a yield of at least 7%.

A top Canadian telecom stock with a significant dividend yield and cheap valuation

Telecom stocks are often some of the best passive income generators you can buy due to their consistent ability to generate billions in cash flow and the essential services they provide. That's why, with Telus (TSX:T) trading off its highs and offering a yield of roughly 7%, it's easily one of the best Canadian dividend stocks to buy while it's cheap.

The stock is one of the most reliable passive income generators in Canada, has a sustainable dividend, and is aiming to continue its impressive dividend growth streak.
In fact, in each of the last five years it's increased its dividend twice annually and its total dividend has increased by over 33%. That's an insane increase in income from such a reliable investment in just five short years.

Therefore, while it's cheap and trades off its highs, it's certainly one of the best Canadian dividend stocks to buy now.

Two top royalty stocks

In addition to Telus, two more top Canadian dividend stocks to buy while they're cheap are Pizza Pizza Royalty (TSX:PZA) and Freehold Royalties (TSX:FRU).

Royalty stocks are some of the best dividend stocks because these businesses are constantly generating significant cash flow and plan to pay most of their earnings back to investors through their dividends.

For example, Pizza Pizza, which offers a current yield of 7.1%, earns a royalty on all the sales done at Pizza Pizza and Pizza 73 locations across Canada. Therefore, because it has no capital expenditure (CAPEX) obligations and very few expenses, the majority of the revenue Pizza Pizza earns in a given month or quarter is returned to investors.

For example, over the last four quarters, Pizza Pizza has earned $40.7 million in revenue. Meanwhile, after paying all expenses, including interest and taxes, Pizza Pizza's net income was $31 million. Of that $31 million, $30.8 million was paid back to investors through dividends since Pizza Pizza aims to keep its payout ratio right around 100%.

This business model not only makes Pizza Pizza ideal for dividend investors, it also makes the stock much easier to understand and predict, since its expenses are minimal and its national sales don't fluctuate very much quarter over quarter and year over year.

Therefore, while it's cheap and offers a compelling dividend yield, Pizza Pizza is certainly one of the best Canadian dividend stocks to buy now.

Freehold, on the other hand, has many similarities to Pizza Pizza. It earns a royalty on all the oil and gas produced on its land by other energy companies.

In addition, it also has essentially no CAPEX requirements either, allowing it to earn significant free cash flow each quarter and pay a significant dividend. That dividend has a yield of roughly 7.5% today. However, unlike Pizza Pizza Freehold doesn't keep its payout ratio at 100%.

Since sales can fluctuate more, especially in the energy sector, Freehold typically keeps its payout ratio at roughly 60%. This ensures it remains sustainable while also building up a cash position for Freehold to eventually use to acquire more land and expand its operations.

So, if you're looking for cheap Canadian dividend stocks to buy now, Freehold is undoubtedly one of the best you can consider.