Royal Gold Inc. (NASDAQ: RGLD) is perhaps a unique way to invest in the gold rush. Gold is at multiyear highs, while interest rates are now at zero and the trillions of dollars are being printed to pay for the economic stimulus. Royal Gold invests in streams and royalty interests, so it effectively acts like the venture/merchant bank rather than as the miner. It has interests in more than 180 properties over five continents, so it has no dependence on any single project. It still has a $6.7 billion market value, and at $102 it is still down about 27% from its high. Its nearly 1.2% dividend yield has a lot of room for improvement once its projects that are closed/curtailed during the pandemic are allowed to resume operations.
Target Corp. (NYSE: TGT) may not be Walmart, but it shares many of the same customers as Walmart and Costco. Target also has proven that it is effectively an essential business in hard times and a destination store in good times that can also live in the omnichannel world. The retailer pays out about 40% of its income as a dividend, and it could easily keep its share buyback plan suspended much longer while it also has committed to lower capital spending. Target stock already was punished after withdrawing guidance, but it has recaptured all those losses plus a little more. Shares closed out 2019 near $127.50, and they were more recently around $103. The $2.64 per share dividend generates a yield still above 2.5%. It remains unclear (and maybe unlikely) that Target would grow revenues in a prolonged recession, but its mix of merchandise, including food, has proven to make Target attractive. Its market cap of $52 billion still leaves much potential upside for the years ahead.
Yum! Brands Inc. (NYSE: YUM) is the owner of KFC, Pizza Hut and Taco Bell stores brands and has thousands of locations globally. It has drive-thru and delivery options, and people will still be able to eat inside many of their locations after the stay-at-home orders are lifted. The company also gets a royalty payment from Yum! China, and its $24 billion market cap comes with a 2.5% dividend yield. At $77.00 a share, Yum! Brands stock would have to rally 50% before it runs into its all-time highs again. Even if earnings drop handily from pre-COVID-19 levels, there should be ample coverage for that dividend payment and a somewhat defensive mix of fast and casual dining choices.
JPMorgan Chase & Co. (NYSE: JPM) is last on this list due to it reporting earnings at virtually the same time this was published. None of the companies in this screen was meant to be considered an “earnings winner” looking back, as this was the list of companies investors would want to own for after the recession. Chase will suffer from the same risks as other banks, via low interest margins, rising delinquencies, credit defaults, certain loan and mortgage forgiveness and the like. It also just tightened lending standards. That said, Chase is the safest bank among the top banks and is considered to have a fortress balance sheet. Its dividend yield of 3.8% is still attractive, even if its dividend might have to be trimmed ahead, but JPMorgan stock would still have to rally nearly 40% before reaching its old, pre-recession highs.