Investors looking for a recession-proof stock should consider the health supplement company Jamieson Wellness (TSX:JWEL). From passive income to a stable footing in both the Canadian and the Chinese domestic retail markets, this stock is often overlooked by investors seeking exposure to dividend-paying healthcare companies. Selling at $20.57 a share and paying a small but perfectly formed dividend, it’s an affordable and rewarding play in the healthcare space.
A rare jewel of a stock
Paying a dividend yield of 1.75%, this stock won’t reward as quickly as a rival dividend payer, such as Big Five banker with a +5% yield, or the freakishly high 12% yield of Chemtrade. However, its position in a defensive sector and the solid niche it’s carved out for itself mean that the stock should be fairly low maintenance. Coupled with fairly low price volatility, this is therefore a soothing option for a long-term savings plan such as a TFSA or RRSP.
As a brand, Jamieson Wellness is respected, well-known, and pulls in a steady stream of revenue. Thanks to its ubiquity in the health foods and mineral supplements industry, the trend towards store controlled branding holds less water than it might do for a lesser business. Vitamins, minerals, supplements are a serious money-spinner, and with the Chinese market opening, investors have a secure, if not great-value play for long-term passive income.
The health kick is big business among the up and coming generations, as well as with health-conscious boomers, with Beyond Meat proving just how stratospheric a wellness-driven investment base can drive a stock. Jamieson Wellness is front and centre in this industry, with company insiders taking a punt on its outlook, essentially betting that its share price has even further to climb. Net income was up in 2019’s first quarter by a little over 12%, with some single-figure growth in revenue on the horizon.
A defensive, diversified dividend payer
Investors bullish on an end to the Sino-American trade war should also keep a close eye on Jamieson Wellness’s share price. The green-capped bottles sell well in China, driving Jamieson Wellness overseas sales up by nearly 30%, and with the market-wide boost that would inevitably follow the end of the trade war, stocks with exposure to the Asian powerhouse may well go through the roof.
The cessation of U.S.-China tensions would likely see the Jamieson Wellness brand permanently buoyed, with long-term benefits for patient shareholders. Bringing in weather-proof profits from its familiar brands, such as Iron Vegan, Precision, LHVS, and Progressive covering sports nutrition to over-the-counter remedies, the company has also secured new product licences in China that will keep the company fresh and relevant both at home and abroad.
The bottom line
A sturdy stock that could outride a recession, Jamieson is extremely popular with consumers; it’s a brand that is likely to withstand whatever the economy can throw at it. By backing a familiar healthcare company with a stable footing both domestically and abroad, investors have a solid long-range play that can provide passive income for years to come.
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Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. Chemtrade is a recommendation of Dividend Investor Canada.