Of course no one likes to see markets take a spill like they have over the past month or so, including the TSX Index threatening three straight months of losses — unless something truly remarkable happens before markets close on the eve of Halloween.
It seems as though investors may have been a bit “spooked” by the threat of rising rates. But have no fear — the latest bit of turbulence is more than likely temporary rather than terminal.
Investors ought to use the opportunity to load up on a couple of these Canadian large-cap blue-chippers.
Suncor Energy (TSX:SU)(NYSE:SU) is one of the largest companies to call Canada home and the largest energy company in Canada, bar none. Suncor stock yields shareholders 3.35% annually following a nice little 12.5% hike in 2018.
If I were going to put my money on one company to survive a prolonged downturn in oil prices, hands down, Suncor would be my number one pick. This company has some of the largest oil reserves of any North American operator.
Rest easy at night with SU stock.
Brookfield is one of the largest real estate property managers on the planet, and until I see otherwise, Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY) is my preferred play for the company’s litany of listed securities.
BPY shares yielded 6.66% entering Wednesday’s trading, and the stock is trading just a little below its book value. Down in the high single digits in October, BPY is a classic value play if there ever was one.
If we are buying Canadian large caps on the dip, without question, a Canadian bank is going to have to be on that list.
I happen to like Canadian Imperial Bank of Commerce too, and certainly Royal Bank of Canada and Toronto-Dominion Bank each have their own set of desirable qualities, but I’m giving the nod to Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) here.
By just a smidge, BNS has the highest-yielding dividend among the four, narrowly edging out CIBC’s 4.79%. BNS stock yielded 4.86% as of Tuesday’s close.
But the other reason I’m leaning towards BNS as my preferred play within Canadian bank stocks right now is the mean reversion factor. BNS has lagged its peers throughout much of the year and is down few more percentage points than CIBC in October.
While I understand there are significant differences between the strategies and markets of each bank, I don’t think they’re all that dissimilar when you really boil it down, so I’m going with the underdog here.