The stock market is in the most precarious position it has been in since the market crash of 2008. Volatility is rampant on the Toronto Stock Exchange. Where it was becoming nearly impossible to point out any cheap stocks, the market is now full of value stocks due to the broad pullback.
These companies are my top picks for assets you can consider adding to your portfolio for a bargain and become wealthy as the market recovers.
Canadian Dividend Aristocrat
Few stocks trading on the TSX can boast as reliable a dividend payment streak as the Bank of Montreal. The bank started paying its shareholders their dividends 191 years ago and has continued paying them ever since without fail. BMO has gone through wonderful highs and experienced extreme lows, but it never stopped its payouts.
The COVID-19 pandemic lockdown has created a challenging environment for the entire economy, and BMO has exposure to significant risk right now. The banking giant’s involvement in oil and gas loans can see it in trouble as the loans it gives out can be problematic in the current market.
Despite the possibility of incurring serious cash flow issues due to loan defaulters, BMO has substantial capitalization to ride the wave. The stock is down by over 38% from its share price at the start of the year. Trading at just 0.84 price to book at writing, BMO shares offer investors attractive pricing.
Real estate giant
With so much uncertainty in the market right now, thinking about any assets related to the real estate sector might be off-putting for investors. Real estate tends to suffer dramatically during market crashes.
With the coronavirus-fueled lockdown in effect, social distancing is mandatory. People are afraid to gather in large crowds. Naturally, going to the shopping mall can be unideal.
SmartCentres Real Estate Investment Trust is the company that is primarily behind the brick and mortar stores for Walmart. Walmart is among the most significant shopping centers around the world. Despite the global health crisis, it is managing to retain healthy foot traffic in its locations due to a majority of its retailers being essential in nature.
At writing, the REIT is down 38.53% from its share price at the start of the year, and it has an ideal 0.61 price to book ratio. Where most REITs are struggling to produce decent revenue, SmartCentres also faced rent collection issues. While it has rent deferral programs to help tenants deal with the situation, it could be an excellent pick right now.
Beaten-down fertilizer stock
A stock that has been in some trouble for several months before the pandemic, Nutrien could also be an excellent pick for value investors relying on the market recovery to make them wealthy.
The Canadian fertilizer giant has a focus on three key nutrients for the agriculture sector: potash, nitrogen, and phosphate. It also has substantial retail operations that allow the company to produce additional revenue.
Due to its primary exposure to the agriculture sector through its commodity and retail operations, Nutrien serves in an industry that relies more on macroeconomic drivers like population growth rather than merely stock market movements.
The long-term prospects for Nutrien seem to be healthy. The fertilizer kingpin stock is down 27.27% from its share price at the start of 2020 with a reasonable 1.15 price-to-book ratio.
Now is as good a time as ever to invest in companies that offer excellent value for your money. Investing in high-quality stocks trading for a discount right now can make you a wealthy investor as markets begin to recover.
To this end, BMO stock, Nutrien stock, and SmartCentres can be ideal additions to your investment portfolio.
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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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Nutrien Ltd and Smart REIT.