Should You Follow Warren Buffett and Invest in Suncor Energy (TSX:SU)?

Investment stalwart Warren Buffett has successfully managed to beat broader equity markets in the past. The Oracle of Omaha identifies undervalued companies with the potential for a strong uptick. The current market decline has decimated several stocks across sectors, giving investors an opportunity to buy quality stocks at cheap valuations.

One industry that has been severely impacted is the energy sector. Low oil prices due to a massive fall in demand have driven energy stocks to multi-year lows. Warren Buffett’s Berkshire Hathaway has exposure to a few oil stocks.

Warren Buffett owns a 4% stake in Occidental Petroleum and has 36 million shares worth $607.55 million. He also owns 1% of Canada’s Suncor Energy (TSX:SU)(NYSE:SU). Warren Buffett has 15 million Suncor shares worth $285.6 million as per the latest SEC filings.

Suncor stock is currently trading at $26.47, which is 41% below 52-week highs. Energy stocks have rebounded in the last month but continue to remain volatile. Shares of Suncor have risen over 75% since March 18 this year. So, should you invest in this Canadian energy giant right now?

Falling oil prices are a major concern

The price of Western Canadian Select (WCS) crude has fallen from close to US$50 in May 2019 to its current price of US$11.56. While these lower oil prices make producing the commodity unprofitable, Suncor is better poised than most to handle the downturn.

Suncor is an oil producer, refiner, and retailer. This means it is an integrated energy company. It should benefit from downstream operations that take place once the commodity is produced. Downstream operations are the process of converting oil into a finished product. Suncor’s oil refinery assets may hugely benefit from lower input costs. However, due to excess supply, oil production is likely to fall in the near term.

Suncor also owns a number of oil refineries in North America as well as several Petro-Canada gas stations. If lockdowns in Canada are lifted, there will be a surge in demand at gas stations during the summer.

Warren Buffett banks heavily on strong fundamentals

Warren Buffett has always invested in companies with strong financials. Such companies generally manage to survive multiple business cycles and generate positive returns for investors.

Suncor has no debt maturities this year and $1.4 billion of debt maturities in 2021. With $6.7 billion in liquidity, the company is unlikely to cut its dividends. Suncor has a forward yield of 7.03% which means a $10,000 investment in the stock will generate annual dividends of $703.

In terms of valuation, Suncor has a forward price-to-sales ratio of 0.9 and a price-to-book ratio of 0.8. While the oil giant will most likely post a net loss this year, earnings are estimated to rebound in 2021.

Analysts expect sales to fall 22.2% in 2020, and the earnings decline is forecast at a massive 140%. Comparatively, sales might rise by 16.9% in 2021 while earnings might rise 153.6%.

Suncor reported record operating funds of $10.8 billion in 2019. Its earnings also rose from $782 million in 2019 from $580 million in 2018. It increased dividends for the 18th consecutive year. The company’s dividend has risen 66% in the last five years.

We can see that Suncor’s recent decline is due to macro-economic factors and not weak fundamentals. It remains one of the top energy stocks in North America.

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Have $2,000 to Invest? Here Are 2 Stocks I’d Buy Right Now

The coronavirus pandemic has taken an unprecedented toll on the Canadian economy. Jobless claims are surging. The fate of many affected small businesses waiting for government relief is still up in the air. Despite the terrible economic data and what could be the worst second quarter since the Great Depression, the stock market has begun to re-gain considerable ground in April.

As it stands now, the TSX Index looks to be at a crossroads, sandwiched between March lows and February highs. The markets could certainly roll over in the coming weeks and months, as underwhelming earnings and gloomy outlooks take hold. However, I think investors who’ve yet to buy should consider doing so with some of the TSX Index’s more compelling bargains that exist today. Sure, they may not be the door-crasher specials that they were a month ago, but they still offer compelling value to those with a long-term perspective.

Consider the following two names if you’ve got an extra $2,000 to invest:

Algonquin Power & Utilities

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) is the perfect buy for a millennial investor who’s looking to use their cash to help transition the world to sustainable sources of energy. The ESG-friendly play is growing its dividend at an above-average rate. Given the favourable environment, I expect more of the same over the next decade and beyond.

In addition to promising renewable energy assets, Algonquin has water utilities that offer rock-solid cash flows, regardless of how bad the coming recession is going to be. It has decent 9.8% ROIC numbers over the past year and a ridiculously high (and likely sustainable) double-digit revenue growth rate. Algonquin is nothing short of a steal for growth-oriented investors while the stock trades at 2.1 times book.

In an era of near-zero interest rates, Algonquin is in a position to come roaring out of this pandemic. So, now is as good a time as any to start nibbling away at the defensive growth stock while it’s trading at a slight discount.

Husky Energy

Many investors have been bitten by Husky Energy (TSX:HSE) over the years. The stock has struggled to cope in an era of low energy prices. The perennial underperformer recently dropped another bombshell, slashing its quarterly dividend by a staggering 90% to just $0.0125. It is trying to preserve capital for what could be a new rock-bottom for the oil scene. The ailing Calgary-based integrated energy company also clocked in a brutal $1.7 billion loss, as industry woes continue mounting.

This is a new low for Husky, which delivered abysmal cash flows for its latest quarter. However, the company is far from bankruptcy. Its strong liquidity position should be more than enough to ride out these brutal times. Although Husky seems hopeless, with few meaningful catalysts, the valuation has become too cheap. Shares are trading at an insane 0.25 times book, which I find to be just plain ridiculous for a company as solvent as Husky.

If you’re looking for deep value, it’s hard to do better than Husky, which is one of the cheapest stocks on the entire TSX Index.

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Study Shows UK Blockchain Companies Are Shifting Back To Traditional Funding Strategies

A new study released by venture capital firm, MMC Ventures, found that UK blockchain companies are turning to traditional capital raising strategies, noting that the Initial Coin Offering, or ICO, model is becoming “increasingly” difficult to utilize.

According to the research published on April 30, ICOs represent a “valuable” funding source for open-source projects.

However, they allege that cheap access to capital combined with a lack of understanding of the esoteric concepts involved in most crypto projects, generated the perfect conditions for a “bubble.” The research further quotes a study, previously reported by Cointelegraph, on the fact that almost 80% of ICOs conducted in 2017 were identified as scams.

By creating an environment in which entrepreneurs focused more on price action than on the business proposition, ICO funding decelerated towards the end of 2018.

The historical context realized that the lack of regulation, technology hype, and faster-increasing prices of cryptocurrencies helped boost ICOs as a funding method between 2017 and early 2018.

Eyes shift towards the company fundamentals

MMC Ventures cites ICObench statistics which show that UK blockchain companies raised $1.5 billion via ICOs between January 2017 and December 2019, which was quite a high number compared to the $656 million invested in equity funding raised by startups.

The study affirms the following regarding this change in the dynamics of funding strategies:

“This has prompted founders to place more focus on company fundamentals.”

Another point highlighted by the research is that the UK is home to a higher proportion of seed and pre-seed blockchain firms compared to the global average.

Companies may not be scaling enough

Although the UK has five times fewer blockchain companies than the US, the equity investment has been ten times less. On this point, MMC Ventures commented the following:

“It is difficult to pinpoint the main driver behind these dynamics – it could be that companies are not successfully scaling or it could be related to less capital being available for later stage financing. Further, European late stage investors are more conservative than the US and thus require more traction before committing to large raises. This is what a lot of blockchain companies lack.”

The statistics presented in the study contrast with the ICObench research, as reported by Cointelegraph in May 2019.

According to the token rating platform, the ICO sector showed signs of an uptick due to positive sentiment. They state that this was fueled at that time by a crypto market rally.

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Tariff Man Strikes Again; Clorox Cleans House

Friday Four Play: The “Return of Tariff Man” Edition

Dateline: May 1, 2020 — “Tariff Man” strikes again!

You thought he was gone, dear reader, but Tariff Man is mulling a return from retirement. We haven’t seen this much groaning since Rob Gronkowski’s appearance on The Masked Singer.

According to The Washington Post, U.S. officials are debating retaliatory proposals for China’s handling of COVID-19. The report said that ideas include canceling part of the U.S.’s debt obligations to China … and renewed tariffs are on the table.

When asked about canceling U.S. debt obligations, President Trump said: “I could do the same thing but even for more money, just putting on tariffs.”

Looks like I have to dust off the ol’ Great Stuff Trade War Cycle chart.

Following Trump’s tariff comments, the Dow plunged more than 400 points on the market open.

Going by the Trade War Cycle chart, we’ve already blown through the “Administration is tough on trade with China” phase … plunging headlong into the “Market sells off on trade war fears” phase:

I’m providing the chart today for all the new Great Stuff readers out there, just so you know what could be headed our way. We followed this exact cycle for the latter half of 2019 until the phase 1 trade deal was signed in early January.

However, I don’t see this latest tariff threat lasting long. The economy already struggles with the COVID-19 pandemic lockdown. A renewed trade war — complete with nasty tariffs — would hurt the technology sector badly. That’s unfortunate because tech has been the one market sector to outperform so far this year.

Hopefully, the market’s reaction to the tariff news will give Trump a pause about pushing ahead with this plan of action — for all our portfolios’ sakes.

And now for something completely different … here’s your Friday Four Play:

No. 1: A Clean Sweep

Congratulations are in order, dear readers!

If you bought into Clorox Co. (NYSE: CLX) when Great Stuff recommended it back on January 31, you’re up more than 20%! (For the record, the S&P 500 is down more than 11% for this period. You’re beating the market!)

In fact, Clorox shares were among the few bright spots in today’s market. The stock gained more than 4% after Clorox beat Wall Street’s quarterly earnings and revenue expectations.

“Beyond the extraordinary growth in our disinfecting products, we saw broad-based growth across all four segments as our portfolio is uniquely positioned to serve consumers in this unprecedented time,” said CEO Benno Dorer.

If you already own CLX, I’m putting a “hold” on the shares. Yes, Clorox should continue to see solid earnings throughout the COVID-19 pandemic, but CLX is approaching key price resistance near $200.

In other words, I expect CLX to trade sideways below $200 for the time being. I don’t recommend buying in at this price point, but I also don’t recommend selling yet. CLX should hold its value better than the rest of the market.

No. 2: Today’s Secret Word? Buybacks!

More of the same? From Apple?! Color me surprised. I’m flabbergasted. Shook.

Apple Inc. (NASDAQ: AAPL) reported earnings after yesterday’s close, and if you need any help sleeping this weekend, the company’s business update is … is … zzzzz.

Both earnings and revenue beat analysts’ estimates by sizeable margins. So far, decent. Heck, I’d be impressed if things stopped there. But, just like almost every other Apple quarterly report for the past few years, you can already guess what comes next:

IPhone revenue drops!

Services revenue rises!

When supply chain issues early in the quarter meet falling iPhone demand (Give me headphone jacks or give me … better Bluetooth!), it’s not like this was an unlikely scenario. Throw some brand-new tariff uncertainty into the bag of Apples, and it’s almost like we’re back in the balmy days of 2019 … and 2018.

CEO Tim Cook says: “We have great confidence in the long-term of our business. In the short-term, it’s hard to see out the windshield to know what the next 60 days look like, and so we’re not giving guidance because of that lack of visibility and uncertainty.”

Long-term confidence? I say “nay nay.”

Do you know what instills long-term business confidence? Innovation. A clear direction forward. New products — not slightly different iterations of the same one. Above all? Reinvesting in the business.

When it comes to that last point Tim Cook also said “nay nay.” Now, get ready to scream! Instead of pouring its profits back into tech research and development, it’s time for $50 billion worth of buybacks! (Whoooo-eeee!)

You’d think that with Apple designing chips to detangle itself from Intel’s clutches … and the fact that we’re nearly knee-deep in recession mode, tariff talk and supply chain disruption … even a three-year-old could find better ways to spend $50 billion. Maybe then, AAPL investors would at least get ice cream or a Hot Wheels track out of the deal.

Forget Apple… If you want actual innovative tech to invest in, Paul Mampilly knows just where to start. Click here!

No. 3: Why Don’t You Have a Seat?

Wall Street expected Amazon.com Inc. (Nasdaq: AMZN) to crush revenue targets. And it did.

What investors didn’t expect, however, was for the company to return to spending cash like a drunken sailor on shore leave after 12 months at sea.

As the de facto online retailer for the pandemic stay-at-home market, Amazon raked in sales of $75.45 billion last quarter. Very impressive. Earnings, however, came up a touch short due to increased spending. But that was the tip of the iceberg.

“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,” CEO Jeff Bezos told investors in the company’s conference call.

The company anticipates $4 billion in COVID-19-related costs for the current quarter. That’s basically all of Amazon’s profits, leading analysts to speculate that the company could post its first quarterly loss in five years.

In fact, Amazon projected the current quarter’s operating income to land between a loss of $1.5 billion to a gain of $1.5 billion. How’s that for uncertainty?

That said, long-term Amazon investors are used to the company spending money hand over fist. Amazon knows that you need to spend money to make money. Still, anyone looking to buy AMZN might want to wait for a retest of the $2,200 area — home to the stock’s February highs.

All the AMZN newbies out there will be shocked by this spending spree, and an extended decline to support levels due to profit-taking is likely in the cards.

No. 4: Big Beats Are the Best

Dear AbbVie, my arthritis has me burning up lately, and all my husband gives a $@&# about is biotech earnings beats. How can I get him invested in me again? — Feeling traded, Boise, ID.

Break out the IcyHot: Biotech giant and Great Stuff Pick AbbVie Inc. (NYSE: ABBV) just delivered the pandemic earnings season triple threat!

First, we have earnings in at $2.42 per share — a big beat on expectations for $2.25 a share. Better still, AbbVie racked up $8.62 billion in sales worldwide, besting analysts’ estimates by $300 million and some change.

Here’s the sweetener: Not only did AbbVie keep guidance intact … the company even projected full-year earnings will rise 7.5% over 2019’s figures.

How? Because of billion-dollar blockbuster Humira, which treats arthritis, plaque psoriasis, ankylosing spondylitis (bless you), Crohn’s disease and ulcerative colitis. It’s like the Swiss Army Knife of immune system drugs, and it’s AbbVie’s secret sauce to navigating the pandemic market.

If you bought when we recommended ABBV in our “4 Stocks to Beat the Wuhan Virus” issue … you’re up about 3%. Hey, not every biotech play is a high-flying, overnight millionaire maker. (That said … can I get a “heck yeah!” for Great Stuff readers who banked triple-digit gains on our free Inovio Pharmaceuticals Inc. (Nasdaq: INO) biotech trade?)

The market’s just now waking up to AbbVie’s resilience, and you know what? That’s OK. Because today, AbbVie proved its mettle as a solid, cash-printing machine. And that’s a whole lot more certain than the dozens of “Me, me, look at my vaccine!” biotech bets that the market has pushed up over the past month.

(Editor’s Note: It’s a biotech blowout bonanza! Still looking for a way to invest? It’s not too late … if you click here ASAP.)

Great Stuff: So Long and Thanks for All the Fish!

That just about wraps up what might be earnings season’s busiest week yet. And next week looks like no sleeper when it comes to tech, biotech and e-commerce stocks.

Stick with Great Stuff, and we’ll keep you in the loop with all the earnings excitement your eyes and ears can handle!

Don’t go gentle into that good weekend — but do remember that Great Stuff is always on social media too. Here we are on Facebook and Twitter.

Until next time, be Great!

Joseph Hargett

Editor, Great Stuff

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Bears and Bulls Make Money — Pigs Get Slaughtered

I learned to trade in the aftermath of the dot-com collapse.

It was one of the most brutal bear markets in history. The Nasdaq Composite Index dropped 78% over two years from its peak in 2000.

Many traders lost their livelihood, while most investors lost their retirement savings.

But that hair-raising 78% drop doesn’t tell the whole story.

When you hear of a big drop in the stock market, it’s easy to assume that making money is simple.

All you need to do is just short the indexes and the Big Tech names and hold on as they fall lower, right?

Sounds easy. But the reality isn’t so simple…

Even though stocks sunk over two years following the dot-com crash, there were eight short squeezes where the Nasdaq bounced 20% or more.

That’s an average of one 20%-plus rally or more every three months.

Those countertrend rallies were vicious. Learning to trade post-dot-com was like learning to swim in choppy, stormy seas.

It weeded out the weaker swimmers and made the survivors even better traders.

I remember days when the head of the trading firm I worked at would walk around the floor to remind us about the importance of staying disciplined.

I still hear his gruff voice with the Long Island accent repeating the old Wall Street saying: “Bulls make money. Bears make money. Pigs get slaughtered.”

This lesson — to not get excessively greedy — couldn’t be more apparent today.

That’s because with more than 30 million Americans unemployed, it’s hard to find certainty anywhere.

Not All Bear Markets Are the Same

I don’t want to mince words here. I still believe the coronavirus shutdown will eventually end.

And I still believe that we’re headed for the “mother of all bubbles” in the next few years, given the unprecedented amount of fiscal and monetary stimulus that’s been thrown at the current health crisis.

However, there’s no denying that we’re in a bear market.

It won’t be a prolonged bear market like the one in 2000-2002, though, or even the 1.3-year bear market of 2008-2009.

Those bear markets differed in that they washed away speculative manias in dot-com and housing.

Today’s bear market doesn’t face the same challenges.

The S&P 500 Index, at around 22 times earnings, was within its average historical range before the crash. That means stocks were priced fairly based on how much profits they were bringing in.

The S&P 500 yield, at 2.04%, is a full percent higher than the 30-year U.S. Treasury yield. That’s the highest since 2009, and a signal that stocks are cheap on a relative basis.

Compared to Bonds, Stocks Are Incredibly Cheap Right Now

So, stocks look attractive right now … but the economic data is set to get worse.

The Future Is Completely Unknown

Wednesday’s first-quarter gross domestic product (GDP) growth came in at -4.8%. But the shutdown, which started in mid-March, only encapsulated one-sixth of the first quarter.

That means the first quarter will look like a nice breeze compared to the F5 tornado we’re currently facing.

In the last six weeks, 30.3 million American workers applied for unemployment insurance. That’s more than 1 in 6 workers.

For the second quarter, consensus estimates for GDP are at a 26% drop.

Yes, that’s -26%. (No, I didn’t forget the decimal place.)

Wall Street’s estimates vary widely, meaning there’s no clarity or certainty to these predictions.

It’s a complete unknown.

Goldman Sachs thinks GDP will drop 24%, while JPMorgan Chase estimates a 40% plunge.

The situation is causing Americans to shift from consumption to saving.

The personal savings rate hit 13.1% last month, the highest level since 1981. Americans fear what’s ahead and also have nowhere to spend their money.

This will take a toll on future economic growth. But don’t tell that to stock investors…

Don’t Let Excessive Greed Take Over

Right now, the bulls are rubbernecking past a car crash.

The prevailing narrative is that the market has already bottomed, and all of this economic uncertainty is already priced into stocks.

After all, the S&P 500 has risen over 30% from its lows and is within 15% of a new all-time high.

I agree: It’s likely that the market has bottomed. However, be careful of excessive optimism.

There’s still an unbelievable amount of economic and health uncertainty down the road.

And don’t forget that bears and bulls make money, while pigs get slaughtered.

Regards,

Ian King

Editor, Automatic Fortunes

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2 Cheap REITs: Value Investors’ Dream or Value Trap?

Since practically everyone has stopped going to work, ceased shopping, stopped going out for entertainment, REITs are suffering. Rents have been paused in an attempt to stabilize the economy. Unit prices of formerly popular names like H&R REIT (TSX:HR.UN) and RioCan REIT (TSX:REI.UN) are trading around or below their book values. 

Are they a value investor’s dream?

If you like sniffing around for deals, Canadian REITs are likely to be a sector that will grab your attention. H&R and RioCan look pretty tempting at these levels. They have been absolutely slaughtered and have not recovered as quickly as other stocks.

Right now, H&R is trading at around $10, a far cry from its previously stable price of just over $20 a share. RioCan is not doing a whole lot better, currently trading at around $16 a share after having fallen from its relatively stable price of around $25 a share. 

I’m going to skip price-to-earnings multiples at the moment, since it is pretty certain that earnings are going to fall into the toilet. I’ll instead focus on book value, which is a much more pertinent number at the moment considering much of the value of these companies comes from their intrinsic land values.

Currently, both companies are trading at huge discounts to their stated book values. RioCan trades at about 0.62 times its stated book value. H&R has an even more drastic discount, trading at about 0.42, or less than half, of its stated book value. These stocks are cheap according to this metric; there is no doubt.

Where’s the risk?

Much of the risk, in my opinion, comes from the book value itself. Earnings losses and the effect of a recession in Canada have been largely priced in already, so it is the value of the company’s assets that are in question.

Luckily, the good news is that many of the properties that the companies own are in large, urban centres such as Toronto. It is highly probable that these properties have a better chance to retain value over time. They also benefit from the fact that interest rates are likely to remain low, which lowers the cost of financing and might generally support real estate as an asset.

The problem is, what if real estate does fall sharply in the coming months and years? What if the global debt load, irrespective of insanely low interest rates, becomes unsustainable? The resulting cascade of debt defaults might push asset prices, including real estate values, lower. The book value of these companies could collapse with earnings, driving their stock prices even lower.

Distribution yield

One of the main reasons people buy REITs is for the steady income these companies generally provide. These companies are no exception, with current yields of 13.4% for H&R and 8.69% for RioCan. The yields are generous, but they are also more at risk of a cut than they ever have been before.

The pandemic is pretty much the worst thing that could have happened to these REITs. Even in a financial crisis, people can still go to buy things at a store. Right now, the doors are shuttered and offices are closed. There is literally no way to go out and buy much of anything, and the choice to go to work has been forcibly taken away.

Furthermore, after the crisis ends, who knows how much of the work-from-home mentality will remain. Maybe it will never return to pre-pandemic levels, leaving some offices shuttered for good.

The Foolish takeaway

In this article, I am neither recommending buying or staying away from these stocks. This is a bipolar choice, depending on your view of real estate and the economy going forwards. If you think real estate will hold its value over the next several years and possibly go up, these are screaming buys today. If you think real estate will go down and that there will be a permanent change in the working environment going forward, stay away.

Do not buy these as income stocks at this point in time. The dividends could stay in place or be cut. If you do buy, think of the yield as a bonus to a potential capital gain while you wait for a recovery.

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This Residential Landlord May Weather the COVID-19 Storm

From the looks of it, the COVID-19 pandemic will likely put the commercial real estate space in North America in a tough spot. However, it is unlikely that the residential real estate sector will go through a similar kind of pain, thanks to government stimulus efforts in the United States and Canada. These efforts should help the middle market resident demographic weather the crisis.

The federal governments in Canada and the United States are looking at several options to lessen the burden on the average resident. This includes wage replacement, expanded unemployment insurance, and small business loans tied to payroll protection.

Tricon Capital (TSX:TCN) is a residential real estate company primarily focused on rental housing in North America. Tricon has $8 billion in assets under management and approximately 32,000 single-family and multi-family rental units in its portfolio.

The company provided an update on its business and select operating metrics on April 16. From the looks of it, Tricon should manage to navigate itself out of COVID-19.

In its single-family rental business, Tricon achieved record same-home occupancy of 97% at the end of March. As of April 15, Tricon has collected over 90% of April rents. This represents 95% of historical collections at the same point. Less than 1% of single-family rental residents have requested a rent deferral plan because of economic hardship.

In the U.S. multi-family business, occupancy remained stable at 94% throughout the first quarter. As of April 15, Tricon had collected 92% of April rents. This represents 96% of historical collections at the same point. Approximately 3% of its multi-family rental residents have requested a rent deferral plan because of economic hardship.

Tricon has experience of a downturn

Tricon is a company that plays a defensive game and this is borne out of its experience in the 2008 global financial crisis. The company’s pure for-sale business model was in the eye of the storm and its existence was threatened. Over the next decade, Tricon transformed from an inherently cyclical business to a rental housing company that provides essential shelter to the workforce.

The average rent is between $1,200 to $1,500 per month for its U.S. operations. The household rent-to-income ratios are in the low 20% range which indicates the business is designed to perform relatively well across business cycles.

Tricon has temporarily paused acquisitions of single-family rental homes. These acquisitions might resume under stable macro conditions.

In its press release, the company stated, “Tricon has also paused the value-add capital expenditure program in its U.S. multi-family portfolio and other non-essential capital expenditures in its single-family rental portfolio to preserve liquidity and safeguard employees and contract workers.”

Tricon’s liquidity consists of a $500 million corporate credit facility. It also has $175 million of undrawn capacity as of March 31.  Tricon also had approximately $53 million of cash on hand as of March 31, 2020, which brings liquidity to $228 million. This should be enough to weather the pandemic and get out relatively unscathed.

Tricon stock trades at $8.25. It has fallen 32% from its 52-week high, driving the forward yield to 3.4%. The company’s strong fundamentals coupled with the potential for capital appreciation makes it a winning bet right now.

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The Motley Fool owns shares of and recommends Tricon Capital. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned.

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