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The Toronto Stock Exchange has had a long bull run starting in November last year. However, the index is sputtering in the last month of the year. With the heightened volatility due to the new COVID variant, you must be more discerning if you’re investing today.
Summit Industrial (TSX:SMU.UN), Jamieson Wellness (TSX:JWEL), and Aura Minerals (TSX:ORA) are tops on smart investors’ buy lists. These companies can overcome the persisting pandemic-related risks and reward you with superior returns in 2022.
Summit Industrial is a top performer in the real estate sector. This $3.94 billion real estate investment trust (REIT) leases light industrial properties in high demand due to the e-commerce juggernaut. Even before the pandemic, the light industrial sector has been showing consistent, solid, and stable fundamentals.
Performance-wise, the REIT has outperformed the red-hot energy sector (+68.3%) and the TSX (+17.81%) with its 69.72% year-to-date gain. At $22.50 per share, the dividend yield is 2.51%. Summit reported 15.6% and 16.4% net income increases in Q3 2021 and year-to-date 2021 (three quarters), respectively, versus the same periods in 2020.
As of September 30, 2021, the occupancy rate is 99.2%, while the average lease term is 5.5 years. Also, rental revenues are growing, given the high retention rate (76.1%) and contractual rent steps (1.9% average annually). Summit’s competitive advantages include low capital investment and maintenance expenditures and a broad, diverse tenant base.
New consumer baseline
Jamieson Wellness president and CEO Mike Pilato is on point in saying the continued focus on health and wellness has become a permanent fixture in consumers’ daily lives. He said, “This new consumer baseline reflects the extended duration of the COVID-19 pandemic.”
Pilato noted that there’s a long-term commitment to using vitamins, minerals, and supplements to maximize vitality and well-being. The $1.64 billion company from Toronto develops, manufactures, and sells natural health products in Canada and abroad. According to management, it curates Jamieson’s product portfolio to help maintain customers’ overall health.
In the nine months ended September 30, 2021, Jamieson grew top and bottom lines by 13.4% and 21.8% versus the same period in 2020. The company had $109.8 million in cash and available revolving and swingline facilities. Investors enjoy a 14.28% year-to-date gain on the stock market on top of the modest but safe 1.48%. This consumer-defensive stock trades at $40.67 per share.
Aura Minerals is number one on the 2021 TSX30 List, beating tech phenomenon Shopify. Furthermore, this mining stock is cheapest ($10.10 per share) of the three stocks in focus but pays a hefty 4.33% dividend. The $784 million gold and copper producer maintains a positive outlook in the year ahead, notwithstanding the Omicron scare.
Rodrigo Barbosa, Aura’s president and CEO, said, “Our 2021 production guidance indicates an increase of nearly 30% compared to 2020, which confirms our solid and consistent plan to double our production by 2024.” Management said it will work to improve current operations and continue growing in 2022. Also, Aura aims to produce 400,000 to 480,000 gold-equivalent ounces (annual) for year-end 2024.
The stock market is trending downward, but it shouldn’t discourage people from investing. Summit Industrial, Jamieson Wellness, and Aura Minerals are buying opportunities for smart investors.