Market Crash 2020: Your Chance to Get Rich!

While the mass discount is over, there are still stocks trading below their fair value. If you can choose the right ones, your chances of getting rich are high.

| More on:
Two hands holding champagne glasses toasting each other with Paris in the background

Image source: Getty Images.

If you haven’t yet benefited from the sell-offs and low valuations of amazing companies offered by the market crash, there’s still time. Your choices might be limited now, as a lot of good stocks have reclaimed their pre-crash valuations.

Still, if you are willing to sift through some of the still-cheap stocks to look for companies with the highest chances of recovery, you can still use this market crash to your favour.

The best place to look for cheap stocks would be the industries that have suffered the most and are slow to recovery: energy, airlines, financial sector, and some real estate companies.

A fast-growing energy stock

Parkland Fuel (TSX:PKI) is an independent fuel retailer, a decent growth stock, and a seven-year-old dividend aristocrat. The company got hit just as hard as other companies in the sector when the worst of the market crash hit and fell over 58% of its start-of-the-year value. While it has recovered substantially, it’s still available at a 23% discount.

This $5.49 billion market cap company operates in 25 countries. Two major fronts the company operates in are supply and marketing of fuel and convenience stores. It works with (and under) recognized brands like Chevron, Sol, and Pioneer, etc.

Before the crash, the company grew its market value by about 100% in the past five years. Even now, with the current low valuation, it’s offering a five-year CAGR of 12.34%.

That’s substantial enough to turn a one-time $30,000 investment into a million dollars in 31 years. As for dividends, the company has been growing its payouts for seven consecutive years and hasn’t slashed them even during the recent market crash. It is currently offering a modest yield of 3.22%.

A growth-oriented REIT

Canadian Apartment Properties REIT (TSX:CAR.UN) is not as discounted as Parkland, but it’s still 20% low from its yearly high value, and currently trading at $48.4 per share. It’s also a Dividend Aristocrat, with eight consecutive years of growing dividends under its belt.

Thanks to a portfolio of 65,000 apartments, townhouses, and manufactured homes across Canada, most of its income is tied to dependable rentals.

Despite the harsh first quarter, the company managed to increase its operating revenues by 18.8%, and NOI by 21.3%. The company offers amazing capital growth opportunities. The stock returned over 114% in the past five years, resulting in a CAGR of 16.49%.

At this rate, a $30,000 investment can grow to a million dollars in 23 years inside your Tax-Free Savings Account (TFSA) or RRSP.

While its dividend growth is not as substantial, the current yield is decent enough at 2.92%. But the payout ratio is very safe at 20.8%.

Foolish takeaway

Even though past performance is not a surety of future growth, that’s all we have to go on for now. That said, both Parkland and CAP REIT have strong business models and dependable income sources.

Both stocks have the potential to grow your wealth substantially. If you are still on the lookout for discounted stocks, Parkland and CAP REIT deserve to be on your radar.

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.

More on Dividend Stocks

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »