With the pandemic recovery underway, investors are increasingly looking for stocks that can hold their own in terms of their valuations right now. Many pandemic reopening plays have surged in this environment. Accordingly, many income opportunities are starting to look attractively valued right now.
Indeed, those seeking income, growth and value may have difficulty doing so. After all, this is a difficult market to navigate today. That said, these two stocks are among the best in the market right now. And they’re ones I think are perfectly suited for a retirement portfolio.
Let’s dive in.
Income opportunities: WPT Industrial REIT
WPT Industrial REIT (TSX:WIR.U) continues to be my favourite pick in the real estate sector. Indeed, there are a variety of reasons for this.
Perhaps the key thing investors should focus on with this REIT is its industrial real estate focus. For investors betting on real estate sectors with the potential to outperform over the long term, industrial real estate is an overlooked area right now, in my view. Indeed, industrial real estate isn’t really pretty. We’re talking about warehouses and distribution centres. However, for those betting on the rise of e-commerce over time, industrial real estate is the place to be. These facilities directly support growth in this segment of the economy.
For WPT, a company focused on the U.S. market, investors get a tonne of upside with minimal risk. The company’s occupancy rate of 97%, its portfolio of world-class properties, and its extremely stable cash flows provide a recipe for success for long-term investors.
Currently WPT yields 4%, with a very reasonable valuation. The company’s payout ratio is low, and there’s lots of potential for dividend appreciation from here. There’s really a lot to like about WPT in the REIT space right now.
Fortis
As far as utilities go, Fortis (TSX:FTS)(NYSE:FTS) continues to remain on my list of top picks.
This Dividend Aristocrat has been at the dividend-growth game for a long time. The company’s track record of hiking its dividend for nearly five decades is nearly impossible to find in the market today. In good times and bad, Fortis is there to provide investors with growing dividend income. For those with rising income needs in retirement, this is a perfect stock to place in an RRSP right now.
The company’s 3.6% yield is lower than many REITs or other high-yielding stocks on the market. However, I view the company’s dividend growth and its stability as the primary reasons for this. Fortis should be viewed more as a bond proxy than anything else.
This defensiveness is derived from a regulated utilities business providing iron-clad, stable cash flows. Fortis is one of those slow-growth names that will consistently produce high single-digit to low double-digit returns over the long term. For those with a very long-term investing time horizon, this level of safety is among the key reasons to own this stock.
