Global markets were pummeled last week, and the S&P/TSX Composite Index was not spared from the carnage. It plunged 6.7% when trading concluded on February 28.
While investors were understandably flustered, pullbacks often present an opportunity for those willing to take a step back from the panic. It’s often useful to look at how investing legends like Warren Buffett are reacting. For Buffett and others like him, this is the time to gorge on value.
Over the weekend, I’d looked at dividend stocks that were enticing after the market bloodbath. Today I want to take a snapshot of some of my favourite discounts after the worst single week on the markets since the financial crisis of 2008.
Diving into the bargain bin
Canadian bank stocks are reliable profit machines, which is why it’s always nice to pick them up at a discount. Shares of Bank of Montreal (TSX:BMO)(NYSE:BMO) plunged 9.6% week over week as of close on February 28, pushing the stock into negative territory for 2020.
BMO released its first-quarter 2020 results on February 25. Adjusted net income rose 5% year-over-year to $1.61 billion and adjusted earnings per share increased 4% to $2.41.
It reported strong earnings in its Canadian Personal and Commercial Banking, Wealth Management, and Capital Markets segments. BMO still offers a quarterly dividend of $1.06 per share, representing a 4.6% yield.
Shares of BMO possessed a favourable price-to-earnings ratio of 10 and a price-to-book value of 1.2 at the time of this writing. Its stock had an RSI of 11, putting BMO stock well into technically oversold territory.
The Canadian housing market has bounced back nicely in recent months, and Equitable Group (TSX:EQB) is well positioned to benefit from improvement in this sector. Shares dropped 16% over the past week. Even after this sharp drop, the stock has still increased 29% year over year.
Equitable Group put together a strong 2019. Retail loan principal outstanding rose 13% year over year to $18.3 billion and commercial loan principal outstanding also increased 13% to $8.3 billion.
The company’s adjusted diluted earnings per share shot up 22% to an annual record of $12.29. Equitable Group hiked its quarterly dividend by 23% from February 2019 to $0.37 per share.
Better yet, the stock had a very favourable P/E ratio of 7.3 and a P/B value of 1 as of close on February 28. Its stock is also in oversold territory with an RSI of 17.
Oil stocks have been ravaged along with spot prices as the market has reacted to falling demand. However, there are new reports that indicate OPEC is set to pull the trigger on a production cut. Investors who want to buy the rumour should consider Parex Resources, a Calgary-based oil producer.
Parex Resources boasts an immaculate balance sheet. Its stock last possessed a P/E ratio of 7.1 and a P/B value of 1.4. The stock also fell into oversold territory and finished the week with an RSI of 25.
For investors on the hunt for income at a bargain price, Shaw Communications should be on your radar. Its stock offers a monthly dividend of $0.09875 per share, which represents a strong 5.1% yield.
The Calgary-based telecom saw its stock fall 8.8% over the past week. Shares closed out the week with a favourable P/E ratio of 17 and a P/B value of 1.7. Shaw stock last had an RSI of 11, putting it deep in oversold territory.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned.