Market volatility isn’t always a bad thing. Sometimes, it can lead to massive discounts on otherwise stellar stocks. In fact, some of those stocks can slip so far into discount territory that they become highly sought after by long-term investors.
Given the volatility we’ve seen over the past year, there’s no shortage of cheap, discounted stocks for long-term investors right now.
Here are three options to consider for your portfolio
Down 16% in the past year, but still a long-term gem
Let’s start with mentioning BCE (TSX: BCE). BCE is the largest of Canada’s big telecoms, offering coast-to-coast service for its core subscription-based services. The company also boasts a media segment comprising of both radio and TV stations that provide an additional source of revenue.
That media segment has come under scrutiny lately, as BCE announced a series of cuts to the segment. BCE also noted that the cuts are part of a larger transformation of the company, embracing a more digital presence.
Between the announcements and the impact of rising rates, BCE’s stock price has dipped a whopping 16% over the past year. In the same period, the price-to-earnings (P/E) ratio on the stock now sits at an attractive 22.25, while the dividend has swelled to 7.87%.
The takeaway for long-term investors is that BCE is a long-term investment that pays out a very generous dividend. Investors who buy on the low now can start earning a juicy income while waiting for the stock to pick up.
Down 25% in the past two years, yet offering an insane opportunity
Another stock that’s coveted by long-term investors to consider is RioCan Real Estate (TSX: REI.UN). RioCan is one of the largest real estate investment trusts (REITs) in Canada. The company boasts a portfolio of nearly 190 properties focused around Canada’s metro areas.
Historically, RioCan’s portfolio was primarily commercial retail. In recent years, though, that’s shifted to include mixed-use residential. RioCan refers to the segment as RioCan Living, and that’s precisely where long-term investors have a huge opportunity.
Rising home prices, crazy inflation and surging interest rates have all contributed to the real estate market mess we now have. Specifically, this has priced out prospective landlords and homebuyers who don’t have a cool quarter million for a downpayment.
Even better, the residential properties are situated along transit corridors of Canada’s major metro centres. The properties comprise residential towers sitting atop several floors of retail.
For prospective investors, that translates into a lower-risk, lower-upfront investment that still provides a monthly distribution.
As of the time of writing, RioCan offers a 5.95% yield. This means that investors who drop $25,000 into the REIT will generate just shy of $100 each month.
Keep in mind that the investment is considerably less than a home downpayment and doesn’t come with a mortgage, property taxes, or tenant issues.
In short, it’s a great addition to any portfolio for long-term investors, and it’s on sale right now. RioCan trades down a whopping 25% over the trailing two-year period.
How about a defensive investment with a growing dividend that’s still on sale?
Fortis (TSX: FTS) is a stock known by many long-term investors. Fortis is one of the largest utility stocks in North America, with operations in Canada, the U.S., and the Caribbean.
Utilities like Fortis are known for their defensive, yet lucrative business models. Specifically, the utility provides a service backed by long-term regulated contracts. Typically, those contracts can span decades in duration.
What this means is that for as long as utilities continue to provide that service, they generate a very stable and recurring revenue stream. And it’s that revenue stream which permits utilities like Fortis to invest in growth and pay out a generous dividend.
Speaking of dividends, Fortis provides investors with a juicy 4.39% yield. The company has also provided annual upticks to that dividend for an incredible five decades without fail.
That fact alone makes Fortis an appealing option for long-term investors to consider right now. And like BCE and RioCan, Fortis trades down over 7% over the trailing two-year period.
