The coronavirus outbreak is scaring stock market investors. While lockdowns are in place, many are fearful of investing. However, three value stocks are on the radars of fortune seekers. The average dividend yield of the companies is 9.62%, and a $3,000 investment ($1,000 in each) can compound by 241% in 10 years.
Lead bank in Quebec
Laurentian Bank (TSX:LB) is the seventh-largest bank in Canada. This $1.29 billion bank is most dominant in the province of Quebec. Unlike its bigger industry peers, Laurentian has a lean but has a mean manpower complement of 3,300 full-time employees.
The bank’s business lines are retail and business banking, securities and capital markets, and financial services. Laurentian’s subsidiary, B2B Bank, is also a major contributor to revenue with its broad range of products and services as well as 27,000 financial advisors and brokers.
Small- and medium-sized businesses run to Laurentian to improve financial health. Currently, Laurentian is trading at a discount. You can own shares of the bank at $30.12 and partake of the juicy 8.91% dividend.
In the current pandemic, the bank offers a $40,000 interest-free term loan until December 31, 2022. If you can fully pay $30,000 by the said date, the remaining 25%, or $10,000, is complete forgiveness.
Be a pseudo-landlord
RioCan (TSX:REI.UN) is a top-notch real estate investment trust (REIT). For only $15.21 per share, would-be investors will delight in the 9.45% dividend yield. The market cap of this REIT is $4.83 billion. You can be a pseudo-landlord when you invest in this REIT.
According to RioCan’s Ed Sonshine, the REIT’s properties are beacons in surrounding neighborhoods during the present health crisis. The majority of tenants in the owned and operated properties provide necessity-based essential goods and services.
Notwithstanding the $15 million rent deferrals in April 2020, management has assured investors that RioCan has ample liquidity to fund operations and weather the storm. It has a solid foundation because of the major market-focused portfolio.
RioCan is not worried about the non-collection of rent while the crisis is ongoing. It expects to collect most, if not all rent, over time. It can offset the $30 million of security deposits in the event of tenant defaults.
Russel Metals (TSX:RUS) is an interesting option. The shares of this $902.75 million company are trading at $14.52 and offering a lucrative 10.5% dividend. In case you’re unaware, Russel is one of the largest distributors of metals in North America.
The most significant portions of the business are the steel distributor operations and the metals service centre. According to its president and CEO John Reid, Russel’s business units are operating and deemed as essential services.
Among the critical industries where Russel is operating are construction, defence, energy, manufacturing, utilities, and healthcare. Apart from these industries, the company plays an important role in the supply chains of both Canada and the U.S.
Management admits there’s a short-term impact on Russel’s share price. The company, however, has the proven ability to generate cash and will bounce back in the long term. Its flexible operating structure should help overcome the challenges.
For high-risk takers
I need to warn you that the market is very volatile. Invest only if you have a high-risk appetite. Otherwise, wait for the market to stabilize.
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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 Christopher Liew has no position in any of the stocks mentioned.