2 Top TSX Stocks to Own During the Market Downturn
The Motley Fool
Published Dec 11, 2021 10:00
Updated Dec 11, 2021 10:15
2 Top TSX Stocks to Own During the Market Downturn
The COVID-19 virus has another variant spreading worldwide, and it is raising concerns for economies that were recovering after a tough period. The S&P/TSX Composite Index plunged by over 5% on Thanksgiving. At writing, the Canadian benchmark index has recovered by almost 2% from its December 1, 2021, levels. However, many investors might rightfully be worried about a deeper pullback coming soon.
If you’re scared of a market pullback, it might be time to double down on your safer bets and prepare your portfolio to mitigate capital risk if a market crash happens. Today, I will discuss two top TSX stocks that you should consider owning during a market downturn to diversify into defensive assets for your investment portfolio.
Fortis Fortis (TSX:TSX:FTS)(NYSE:FTS) is as safe as it gets if you are looking for ways to protect your investment capital during a market downturn. The $27.15 billion market capitalization utility holdings company has 10 utility businesses operating in Canada, the U.S., and the Caribbean.
It provides natural gas and electric utility services to around 3.4 million customers. Fortis generates most of its revenues through long-term contracted and highly rate-regulated assets, virtually guaranteeing predictable cash flows.
Many investors consider Fortis a bond proxy due to its reliable shareholder dividends. At writing, Fortis stock is trading for $57.25 per share, and it boasts a 3.74% dividend yield. The Canadian Dividend Aristocrat boasts a 48-year dividend-growth streak, and it looks well positioned to continue delivering dividend hikes in the coming years.
BCE BCE (TSX:BCE)(NYSE:BCE) is a $60.19 billion market capitalization giant in Canada’s telecom industry. Canada’s telecom sector has been the most defensive industry throughout the pandemic due to the essential nature of the services it provides.
Telecom companies like BCE can continue generating stable revenues regardless of what happens in the broader economy, making them ideal defensive assets to own during a downturn. As its 5G services expand, BCE could generate even greater returns in the coming years.
At writing, BCE stock is trading for $66.23 per share, and it boasts a juicy 5.28% dividend yield. Adding its shares to your investment portfolio could help you generate significant returns through its shareholder dividends alone. The stock is up by 20.46% year to date, and it could provide you with more wealth growth through further capital gains in 2022 and beyond.
Foolish takeaway When market downturns occur, most equity securities on the stock market tend to decline. However, a few TSX stocks tend to remain firm due to the essential nature of the services these companies provide.
Get The App
If you are worried about a pullback impacting your investment capital, consider investing in Fortis stock and BCE stock. These two companies can outperform the broader market if it tumbles and continue providing you with returns through capital gains and shareholder dividends when the stock market is doing well.
The post 2 Top TSX Stocks to Own During the Market Downturn appeared first on The Motley Fool Canada.
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.