Happy Thanksgiving, Canada.
The year 2020 has been a complete rollercoaster ride. The market has endured volatility not seen in several generations and is still clawing back the losses sustained in March. We still have two more months left in 2020 to endure, which in 2020-speak means we can expect anything. You can be thankful for that volatility today, as it has exposed a number of great stocks to add to your portfolio.
Here are two stocks that offer some protection from that volatility while also providing a handsome monthly income.
I’m thankful for this telecom
Shaw Communications (TSX: SJR.B)(NYSE: SJR) is much smaller than Canada’s Big Three Telecoms. That smaller size may sound discouraging at first, but Shaw does boast several compelling advantages for investors.
First, Shaw lacks a media segment. Shaw sold off is massive media operation several years ago to raise funds for its new wireless business. This made Shaw a hyper-focused pureplay telecom in a field of behemoths. The media exit also helped Shaw bolster its position as a defensive investment option. More importantly, that wireless business that is now set to see strong gains, which leads to my second point.
Shaw’s Mobile arm has already cemented the fourth spot in Canada’s wireless field, and that segment continues to see strong growth. Specifically, Shaw is now viewed as a true alternative to the Big Three and continues to draw in disgruntled customers from its peers. By way of example, in the most recent quarter, Shaw reported 2,200 net new subscribers despite the ongoing COVID-19 pandemic.
The company also managed to keep churn to a record low of 0.96% while growing ARPU by 2.6% during the quarter. This is likely to continue with the recent announcement of Shaw Mobile — which is targeted to existing Shaw internet and TV subscribers, allowing them to bundle in mobile service.
Finally, let’s talk dividends. Unlike Shaw’s telecom peers, Shaw offers a monthly distribution. This makes the stock appealing to income investors. The current yield on offer is an attractive 5.03%, making it an investment to be thankful for.
A home to be thankful for
Another interesting option to consider is RioCan (TSX: REI.UN). RioCan is one of the largest REITs in Canada, with a portfolio that spans across 221 properties with 38.6 million square feet. Those developments are primarily office and retail, but the company is steadily increasing exposure to another area – residential.
RioCan’s venture into the residential market, known as RioCan Living, is a pure masterstroke. The move offsets the decline in demand for physical brick-and-mortar retail sites with the growing desire for affordable housing in Canada’s major metro areas.
RioCan’s diversification into the residential segment also means that the company can offer an impressive monthly dividend with an insane yield of 9.75%.
Investors will definitely be thankful for having RioCan in their portfolio this Thanksgiving.
Final thoughts
In my opinion, both Shaw and RioCan are great income-producing investments. Both stocks provide a necessary service that adds a defensive element lacking in many other areas of the market, which is something to be thankful for this Thanksgiving.
