The first on the list is Bank of Montreal (TSX: BMO) (NYSE: BMO). Big Five Bank stock might seem like a boring investment, but it also makes it stable. From credit cards and personal banking products to mortgages and investment services, BMO offers a wide range of services essential to the economy and to its health. And when things are going well in the economy, the income and profit numbers are strong for a big bank like BMO.
Certainly, the outlook could be brighter in the midst of COVID-19, as many investors are down on financial stocks. However, this is a mistake, because over the long term, bank stocks will continue to perform well.
While the economy is currently in a recession, BMO will come out of it, and when it does, banking will pick up and banks will look good again. The advantage of buying BMO stocks today is that they are so cheap. It is currently trading at $ 78 per share. Before 2020, the last time BMO shares were trading this low was in early 2016.
And yet, its dividend remains intact. By buying at a reduced price, investors today can earn a dividend yield of 5.4%. This is much higher than the normal return on bank stocks:
Outside of this year, you would have been very lucky to buy BMO shares and earn such a large amount.
Saputo (TSX: SAP) doesn’t pay nearly as high a return as BMO, but at around 2% it’s still a good way to increase your portfolio’s recurring income. Saputo recently increased its quarterly dividend payments by 2.9%, from $ 0.17 to $ 0.175.
But what makes this stock great for long term storage is that the company sells many types of dairy products all over the world. Its products are essential for many people, and whether there is a recession or a pandemic, the demand for dairy products will be there.
That’s why it’s no surprise that in the company’s most recent quarterly results, which were through the end of June, Saputo’s numbers were not badly affected. It saw a modest 7.6% increase, but many businesses suffered larger declines amid lockdowns due to the COVID-19 pandemic.
And while sales fell in the United States, in its Canadian and European segments, Saputo’s sales increased during the quarter. Total net profit of $ 141.9 million was also 16.9% higher than what the company reported in the same period last year.
Saputo has generally been very cautious in this regard, recording profits in each of its last 10 reporting periods.
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