2 popular stocks that could skyrocket! By The Motley Fool
© Reuters. Passive Income Powerplay: 2 popular stocks that could skyrocket!
Passive income stocks are a great place if you’re worried about your cash flow losing purchasing power every day due to high inflation.
Yes, central banks are starting to get a little more hawkish in an effort to tame the current rate of inflation. But there is a real risk that inflation will persist much longer. If the Ukraine-Russia crisis worsens, the Fed may need to be slightly more dovish, allowing inflation to linger a bit longer to stage a kind of “soft landing” to prevent a return to lows. unemployment levels seen at the height of the coronavirus. recession.
Either way, I think SmartCentres REIT (TSX:SRU.UN) and TC Energy (TSX:)(NYSE:TRP) are some of the most intriguing power plays in passive income today. Shares of SRU.UN and TRP are yielding 5.7% and 5% respectively at the time of writing. Let’s take a closer look at each name to see which one could fuel your passive income stream for the next five years!
SmartCentres REIT SmartCentres REIT is my favorite Canadian REIT right now. If possible, Canadians should hide the name in their TFSA to make the most of the rich distributions that will float in the path of investors. For those unfamiliar with the company, it is a mall-focused REIT founded in 1989. Shares tumbled in 2020, but have since rebounded above the $32 per share level. Although the payout has shrunk amid the rally, I still think stocks are ridiculously cheap for those looking for passive income and multiple expansion over the next decade.
Smart homes tenants in good financial health. Lockdowns couldn’t bring down Smart’s cast. Looking ahead, Smart is branching out into residences, while maintaining its expertise in hosting high-quality physical retailers. I think the retail-residential combination could be big news for the company and improve the quality of its adjusted operating funds.
Things are finally looking up for the FPI, making it one of my favorite earning plays today.
TC Energy For those looking to take a little more risk, we have the TC Energy Energy Pipeline game. Like Smart, it’s been through tough times amid the COVID recession, with stocks only flirting with those pre-pandemic highs. I believe TC is in a position to surpass such highs, given the tailwinds in the energy industry brought on by rising commodity prices and the many cash flow generating projects that are just as compelling as Keystone.
With the Ukraine crisis propelling stocks in recent months, I think TRP stock is in a good position to breakout. The $70 billion mid-tier operator is geographically diverse, with gas assets in Mexico, and is in excellent shape to soar higher through a continued growth spin and return to dividends and value.
At the time of writing, TC stock has a below average beta of 0.77. With a sales multiple of 5.2x and a cash flow multiple of 15.8x, TC isn’t that expensive given the magnitude of the tailwinds. My takeaways? It’s time to buy the rally, as the energy strength is unlikely to fade any time soon.
The post Passive Income Powerplay: 2 hot stocks that could skyrocket! appeared first on The Motley Fool Canada.
Crazy contributor Joey Frenette owns Smart REIT. The Motley Fool recommends Smart REIT.
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