It’s that time of year again.

Just as the leaves start falling off the trees, Mr. Market is falling out of bed. It doesn’t always happen, but this part of the investing season is often the weakest one for the stock market.

As usual, the sheep are running off the edge of the cliff, while the savvy wolves wait below to gobble up some easy pickings.

If you have the stomach for it, Potash Corp./Saskatchewan Inc. (TSX:POT)(NYSE:POT) and RioCan Real Estate Investment Trust (TSX:REI.UN) might be worth a look right now.

Here’s why.

Potash Corp.

It hasn’t been a great year for Potash Corp. and its investors.

Earlier this year, the Saskatchewan government changed a tax rule that forced Potash Corp. to lower its expected earnings. Shortly after that, spot prices in the global potash market started to slide and are currently at multi-year lows. Throw in a global market share war and weak crop prices and you get a perfect storm for Potash Corp.

As expected, investors are running for the exits and the stock is now down more than 30% in just the past six months.

Weak prices could continue through next year, but investors with a long-term strategy should be excited.

Global potash demand hit a record 61 million tonnes last year. This year’s number was initially expected to come in about the same, but shipments might finish a bit lighter than forecast.

Despite the short-term speed bumps, the long-term trend is clearly up. Today, there are roughly seven billion people on the planet. By 2050 the number could hit 11 billion. In order grow enough food to feed everyone, as well as the animals we love to eat, farmers are going to use a lot of potash to boost crop yields.

Potash Corp. has known this for some time and has planned accordingly. The company is wrapping up a multi-year expansion program that will boost its production capacity to meet the long-term needs.

Investors should benefit because the lower capital requirements in the coming years should translate into more free cash flow available for distributions. Once the market turns and production ramps up, the effect will be even greater.

Potash Corp. reports all of its numbers in U.S. dollars. Earnings for Q2 2015 were $0.50 per share. Operating cash flow was $836 million and free cash flow was $532 million. The company paid out $312 million in dividends, so the distribution was easily covered. The Q3 and Q4 numbers could come in weaker, but the distribution should be safe.

Potash Corp. currently pays a quarterly dividend of $0.38 per share that yields 7.2%. Right now, the stock is trading at just 10.6 times forward earnings.


RioCan operates retail properties in the U.S. and Canada. The stock has taken a hit this year as investors worry about an interest rate hike in the U.S. and the weak outlook for the Canadian economy.

Higher interest rates will drive up debt costs, but the moves should be very small and drawn out, so the impact on RioCan is unlikely to be that dramatic.

As for the Canadian economy, the slowdown can affect the amount of money people spend at the mall, but RioCan isn’t the retailer; it simply rents out the space to the stores. Most of the agreements are long term and the tenants tend to be popular names that have the size and financial ability to weather a downturn.

RioCan reported a 7% year-over-year increase in Q2 funds from operations and re-signed more than one million square feet of space during the quarter at an average rent increase of 9.8%. That suggests things are just fine on the retail front.

RioCan pays an annualized distribution of $1.41 per trust unit that yields about 5.7%.

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Fool contributor Andrew Walker owns shares of Potash Corp.