Passive-income stocks have been a great relief for Motley Fool investors these days. But beyond that, they also offer significant value thanks to the bear market we’re experiencing.
And I really do mean to say, “Thanks.” Right now, it’s like all the stocks on the TSX today are on sale. It offers investors the perfect opportunity to find insane value stocks right now — ones that offer passive income, and strong returns when the market returns to normal.
Because the market will return to normal, don’t question that. Even if we go through a recession and it lasts the next year, after that year, we’ll be back in the black. And you’ll have great returns on top of the passive income you’ve collected. To get the most of it then, consider these three passive-income stocks in value territory.
Brookfield Asset Management
First up, I would consider Brookfield Asset Management (TSX:BAM.A)(NYSE: BAM) on the TSX today. Motley Fool investors may have eyed the stock before thanks to its diverse range of assets around the world. That includes everything from good old-fashioned residential real estate to renewable energy and infrastructure.
And yet this passive-income stock offers some of the best value, trading at 18.07 times earnings and 1.7 times book value. Right now, shares are down 25% year to date, with analysts giving the stock a target price of $89. That’s a potential upside of 56%!
On top of that, you can lock in the asset manager’s dividend yield of 1.22%. That yield has grown at a compound annual growth rate (CAGR) of 8.52% over the last decade. Meanwhile, shares have also climbed by 363% in that time — a CAGR of 16.55%.
CAPREIT
Another company offering insane value is Canadian Apartment Properties REIT (TSX: CAR.UN). This residential property manager owns tens of thousands of residential apartments, townhomes, and more across Canada and the Netherlands. It manages even more throughout those countries and also Ireland. And with more and more people moving towards renting over buying a home in this economic climate, now is a great time to pick up the passive-income stock.
It too offers great value, trading at just 5.7 times earnings, and 0.7 times book value. Basically, it has plenty of cash on hand and continues to bring it in hand over fist. Yet shares are down 26% year to date, even as analysts give it a price target of $62. That’s a potential upside of 44% on the TSX today.
Today, you can lock in the company’s dividend yield of 3.28%, which has grown at a CAGR of 2.69% in the last decade. Further, shares are up 158% in the last decade for a CAGR of 9.93%.
Chartwell Retirement
Another great buy and hold option for long-term Motley Fool investors is Chartwell Retirement Residences (TSX: CSH.UN). This company offers a way into the future boom of senior home living beyond retirement. As the Canadian population ages, baby boomers will soon need these long-term-care homes. And that means there is bound to be significant investment both privately and publicly.
Yet today, Chartwell stock trades at just 3.2 times book value, and shares are only down 4% year to date. So, in this light, you actually get a bit of protection with perhaps less share drops. While the price-to-earnings ratio is high, it has tons of cash on hand and high adjusted funds from operations per unit. The price target is now at $14, offering a potential upside of 27% on the TSX today.
On top of this, you can lock in passive income of 5.53%, with a CAGR of 1.26% in the last decade. Shares are up 87% during that time for a CAGR of 6.46%.
