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the TSX it slowly slides down. The decline is more like a “momentum depletion” phase rather than a strong downward movement associated with market declines and corrections. Still, if the market is going down a lot, you will have enough offers. Many amazing stocks can be quite attractive in value, and you may be able to pocket some generally overvalued stocks at a bargain price.
But that’s not something that can be successfully predicted at this point, and only time will tell if the TSX is actually going down or just fluctuating. If it’s the latter, you shouldn’t expect good deals that could Come with a market crash and check out the amazing deals available right now.
An undervalued high-performance REIT
REITs are usually very generous with their payments, but few REITs are as generous as Slate Grocery REIT (TSX: SGR.U) when it comes to dividend yield. The company recently closed a deal for US $ 390 million, giving it a portfolio of 25 properties in the main metropolitan markets of the United States. The REIT is already fully US-centric and expanded its portfolio quite aggressively.
The current portfolio adds nicely to REIT’s extensive US portfolio of 106 properties in 26 states. Almost all properties are anchored to supermarkets (98%), which protects the REIT from bad market conditions.
The REIT currently offers a delicious 8.3% return and is trading at a price-to-earnings ratio of 4.4 and a price-to-book ratio of 0.8 times.
An undervalued logging company
Based in Quesnel West Fraser Wood (TSX: WFG) is the largest forestry company in Canada and one of the largest (if not the largest) of this type in North America. It has an extensive and diverse portfolio, both geographically and by product. It also has a small presence in Europe (four locations). The strength of their product line is that it covers the full range when it comes to construction.
This forestry giant is an absurd bargain at the moment, mainly due to its price-to-earnings ratio, which is 2.8 at the moment, thanks mostly to stellar second-quarter earnings. And it has remained at these low levels despite the fact that the share price continues to rise and has grown almost 330% since the collapse. Next quarter’s results are most likely to cause a correction, as wood prices have already normalized.
So even though the company is an absurdly good business at the moment (based on the number), it might be a good idea to wait until next quarter’s results before buying.
An iron ore royalty company
Labrador Iron Ore Royalty (TSX: LIF) it is currently negotiating at a price-to-earnings ratio of 6.8 and a price-to-book ratio of 3.8 times. And it’s an amazing deal right now, mainly due to its dividend yield, which is currently quite abnormally high. The return is 19% as of this writing, and unless the company drastically reduces your payments, the company will return the capital you invested in it through dividends in about a year and a half.
The payout rate is about 93.3% right now, which is pretty high, but it’s not in the dangerous 100% plus territory yet. The company has an equity interest and royalties in Iron Ore Company of Canada and offers investors exposure to this profitable business. The stock also offers a bit of cyclical capital growth potential, so it might be a good idea to buy the company when it bottoms out.
Two of the three absurdly good offers pay you generous dividends, and the remaining one is excellent because of its price. If you are interested in starting a dividend-based passive income or just want to use dividends to build a cash reserve, Labrador Iron Ore Royalty and Slate Grocery REIT are excellent and currently slightly undervalued businesses.