The last week of April could prove to be a key test of the market’s coronavirus comeback, with tech titans from Apple (AAPL) to Amazon (AMZN) , as well as McDonald’s (MCD) and other giants all set to report their quarterly earnings results. Meanwhile, governments all over the world are trying to decide how to begin reopening parts of their economies that closed to help slow the spread of the coronavirus.
Corporate earnings always play a vital role in the market, but the next few periods will be even more crucial to help Wall Street and investors figure out just how bad things really are, and might get. Our Zacks estimates now project that overall S&P 500 earnings will fall -15.3% in Q1 and over 31% in the second quarter.
That said, Wall Street has known for weeks that the near-term outlook for many companies looked bleak. And the markets worst days could already be behind us, as the S&P 500’s 25% rally from its March 23 lows helps demonstrate.
But even if markets fall again, investors might still want to buy stocks, or at least add them to their watchlists. Today we take a look at a niche area of equities that can be highly attractive: cheap stocks trading under $20 a share that also pay a dividend. Plus, the stocks we focused on are relatively immune from the current coronavirus economic downturn.
Medical Properties Trust, Inc. (MPW)
Prior Close: $16.31 USD
Real Estate Investment Trusts are often a great source of income, given the dividend payout standards they must abide by. Medical Properties Trust is a REIT that works to acquire and develop net-leased hospital facilities. The firm owns roughly 390 facilities across eight countries.
MPW shares have outpaced the market during the recent comeback and are up over 30% in the last two years. Medical Properties is also trading at a solid discount compared to its industry.
On top of that, MPW’s 6.47% dividend yield crushes the S&P 500’s 2.01% average and tops its highly-ranked industry’s 5.40% average. The stock is currently a Zacks Rank #3 (Hold) that also earns a “B” grade for growth in our Styles Scores system.
Our current Zacks estimates call for the Birmingham, Alabama-based company’s adjusted Q1 funds from operations—essentially its earnings—to surge 29% on 73.2% higher sales. The hospital-focused REIT’s full-year fiscal 2020 revenue is then projected to jump 53% to $1.30 billion, with its FFO set to surge over 25%. Investors should note that MPW is set to release its Q1 fiscal 2020 results after the market closes on Wednesday, April 29, which means it might be prudent to wait before buying.
Amcor plc (AMCR)
Prior Close: $8.68 USD
Amcor completed its purchase of Bemis in June 2019 to create a global packaging powerhouse that services an array of industries, from food and beverage to pharmaceuticals and personal care. The company’s offerings include flexible and rigid packaging, specialty cartons, and more. Amcor has also started to focus on making what it calls “increasingly light-weighted, recyclable and reusable” products that are made “using a rising amount of recycled content.”
Amcor’s push toward sustainability could prove key amid growing backlash to plastic and other forms of waste. Yet, packaging of all types will remain a vital part of the global economy for years, if not decades to come.
With this in mind, our Zacks estimates call for Amcor’s fiscal 2020 revenue to climb 34% to reach $12.68 billion—driven by its Bemis deal. Meanwhile, its bottom line is expected to pop in the next two years and its earnings revisions activity helps it earn a Zacks Rank #1 (Strong Buy) right now.
Amcor also sports an “A” grade for Value and a “B for Momentum in our Style Scores system, and its shares are up 6% in the last two years to crush its industry. The stock has also soared nearly 30% since March 23 and still rests 24% off its 52-week highs, which could give it a ton of runway to continue its climb.
On top of all of that, AMCR’s 5.13% dividend yield easily tops its industry’s—which sits in the top 15% of our more than 250 Zacks industries—2.99% average. And Amcor just announced that it is set to release its Q3 fiscal 2020 results on May 11.
Global Medical REIT Inc. (GMRE)
Prior Close: $10.86 USD
Global Medical, as its name suggests, is another medical-focused REIT that focuses on what it calls “state-of-the-art, purpose-built healthcare facilities.” It also seeks to lease its healthcare facilities to “a single market-leading operator under a long-term triple-net lease.” In fiscal 2019, GMRE’s rental revenue increased 33%, driven by its acquisition of 18 properties.
Global Medical’s revenue is projected to jump over 24% in fiscal 2020 and another 9.4% in FY21, based on our Zacks estimates. Meanwhile, its adjusted FFO is expected to climb roughly 12% both this year and next. Plus, its earnings revision activity helps it hold a Zacks Rank #2 (Buy), alongside its “B” grades for both Growth and Momentum.
GMRE, which is set to release its Q1 results after the market closes on May 6, boasts the highest dividend yield on this list at 7.35%. This beats its highly-ranked industry’s 5.40% average and it isn’t super artificially inflated by a falling stock price.
In fact, Global Medical shares have jumped 40% over the last two years and are up 9% in the past 12 months, despite falling as part of the larger selloff. And GMRE stock still rests over 30% below its 52-week highs even though it has climbed recently.