Public health measures are likely to remain fixtures in Canada for the next 12 to 18 months. Since there’s no full containment yet, COVID-19 can trigger sporadic market corrections, if not a significant crash. While the unemployment rate dropped for the fourth consecutive month in September 2020, it could spike again if shutdowns return with the rise in infection cases.
Various federal aid programs are in place to support individuals and businesses to cope with the coronavirus-induced recession. At this point, it would help to be resourceful. If you can scrimp and spare $3,000, you can buy a pair of stocks for an added financial cushion.
You can split the money between Crombie (TSX:CRR.UN) and Rogers Sugar (TSX:RSI) to spread the risk and get paid an average dividend yield of 7.16%. The dividend stocks will deliver $214.80 in passive income.
CPP REIT stock
Crombie is a $2.05 billion real estate investment trust (REIT) that leases out an array of retail properties in Canada’s top urban and suburban markets. Don’t worry about this REIT struggling in the pandemic. This REIT operates a portfolio of high-quality grocery and pharmacy-anchored shopping centres. Sobeys and Safeway are the lead tenants.
You can purchase the real estate stock at $13 per share and partake of the 6.87% dividend yield. Note, too, that Crombie is the top REIT holding of the Canada Pension Plan Investment Board (CPPIB). Furthermore, the food retail conglomerate Empire and Sobeys’s parent company backs the REIT.
Crombie is competing with Walmart and Costco but should be in the thick of the fight all the way. The REIT has a good redevelopment plan, and being in the right real estate market should give it the edge. Rent collections are in the high 90%, with almost 55% coming from Sobeys and Safeway.
From dull to exciting
Rogers Sugar is a consistent dividend payer (7.45% today), despite operating a less-exciting, if not dull, business. The $490.76 million company carries a rich heritage in sugar production that dates back to 1890. While the industry is heavily regulated, sugar is a consumer staple and, therefore, the business stable.
The acquisition of the Maple Treat Corporation in 2017 establishes the position of Rogers Sugar as the leader in the maple syrup industry. Its subsidiary, Lantic, operates sugar cane refineries across Canada.
Strategic collaboration with a food-tech company and pioneer in developing efficient flavour-delivery technologies should heighten interest in the stock. Rogers Sugar and food tech firm DouxMatok from Israel would collaborate to sell the latter’s sugar reduction technology to North American companies.
Beginning in 2021, Rogers will sell DouxMatok’s technology in the United States. Over the last two years, Lantic and DouxMatok were working together to reduce sugar content in sugar in baked goods by 30% to 50% to address obesity concerns.
Time to refocus
The coming months would be difficult due to the still unfelt effects of the pandemic. It’s time to refocus and practice new ways to earn even from meagre savings. Dividend investing will enable money growth and the building of an emergency fund. The recession might take longer than expected.
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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. The Motley Fool owns shares of and recommends Costco Wholesale.