3 Ultra-Safe Stocks to Buy Today — Before the Next Crash

Ride out the next recession stress-free by loading up on boring stocks like Intact Financial Corp (TSX:IFC) and Fortis Inc. (TSX:FTS)(NYSE:FTS) today.

| More on:
edit Businessman using calculator next to laptop

Image source: Getty Images.

The TSX Composite Index has been on an absolute tear thus far in 2019, increasing approximately 14%. That’s a solid result for the year, and we’re less than a third of the way through it. It’s shaping up to be a good year for investors.

But as we all know, large gains have a way of evaporating quickly. Nobody knows when the market will turn lower, either. The rest of the year might continue to deliver good results, or we might all be currently lulled into a false sense of security. That’s the fun of investing. Nobody can accurately predict the future.

For most people, there’s no reason to change your investment path. We’re long-term investors, so short-term blips shouldn’t concern us. But for some people, it’s prudent to protect gains, like if they’re nearing retirement age or planning a big purchase. Others just can’t handle a big decline, so they should switch to a more conservative portfolio.

If that’s you, then you’ll be happy to read about these three defensive ideas for your portfolio. Don’t delay. The time to act is now.


Most low-risk stocks simply go down less than the market when a recession hits while still giving investors upside potential if the underlying economy continues to grow. Bonds take this a step further. As investors rush from stocks into the safety of bonds during periods of economic uncertainty, the asset class goes up in price. What a powerful thing to own if you believe that a recession is coming.

By far the easiest way for Canadian investors to gain access to the bond market is via exchange traded funds. Two of the most popular are the iShares Core Canadian Bond Universe ETF (TSX:XBB) and an ETF I hold personally to protect against volatility, the BMO Bond Aggregate ETF (TSX:ZAG). Each of these products give investors access to a portfolio of hundreds of individual bonds, issued by both government and high-quality corporate sources. And both funds do this for approximately 0.10% in annual management fees.

Holding a bond fund as part of a balanced portfolio offers another interesting perk. Since bonds, as a minimum, hold their value in a recession, investors who have a healthy bond allocation can sell their bonds during a big stock market sell-off and use the capital to buy undervalued stocks. They then replace those bonds once the market has recovered.


Fortis Inc. (TSX:FTS)(NYSE:FTS) is a boring stock that can still make you rich.

Fortis is the owner of various local electric and natural gas utilities across Canada, the United States, and into the Caribbean. The company boasts more than three million customers who collectively helped it to generate $8.4 billion in annual revenue last year, which makes Fortis one of North America’s largest utilities.

The dullness of the utility business is exactly what makes it so appealing when a recession hits. Things will have to get pretty bad before folks stop paying the power bill. Discretionary spending like eating at restaurants and buying new clothes is easily cut when times get tough, but nobody is going to sit in the dark.

Finally, Fortis pays an attractive 3.6% dividend, a payout the company has hiked annually since 1973.

Intact Financial

Like Fortis, Intact Financial Corp (TSX:IFC) benefits from having a product the average person isn’t going to cut just because the economy took a dive. Intact is a property and casualty insurer, meaning that it insures both houses and cars against the many risks that can damage both.

After becoming the largest property and casualty insurer in Canada by far, nearly doubling the market share of its nearest competitor — Intact has now turned its focus to expanding into the United States. It acquired OneBeacon in 2017, spending some $2.3 billion to crack the largest insurance market in the world. Look for the company to make more acquisitions in the United States as opportunities present themselves.

Meanwhile, the stock offers a beta of 0.50, which indicates that it’s half as volatile as the market in general. Investors aren’t sacrificing long-term returns to get this stability either, with shares increasing 15.1% annually over the last decade with dividends reinvested. The stock currently offers a 2.8% yield.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nelson Smith owns shares of BMO Bond Aggregate ETF. Intact Financial is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

TFSA and coins
Dividend Stocks

Maximize Your Retirement Income: How to Turbocharge Your TFSA Returns

TFSA investors could pick different strategies to boost returns.

Read more »

Golden crown on a red velvet background
Dividend Stocks

Canadian Utilities Is a “Dividend King,” But I Like This Stock Even More

Canadian Utilities (TSX:CU) stock is a solid dividend provider, but there's more to look at then just how much you're…

Read more »

Path to retirement
Dividend Stocks

Retire Rich: TFSA Stocks to Power Your Golden Years

Investing in your TFSA early has huge benefits. Here’s a look at some stocks for your TFSA that can power…

Read more »

money cash dividends
Dividend Stocks

These TSX Telecom Stocks Are Dialling Up Impressive Profits 

Two telecom stocks are dialing up dividend profits for shareholders while inflation and interest are slowing dividends for some companies.

Read more »

Group of industrial workers in a refinery - oil processing equipment and machinery
Dividend Stocks

2 Top Canadian Energy Stocks to Buy Right Now

Blue-chip TSX stocks like these two Canadian energy sector giants can help you generate substantial long-term wealth growth.

Read more »

edit Safety First illustration
Dividend Stocks

Safeguarding Your Wealth: 5 Safe Stocks to Buy in a Rising Interest Rate Market

Established companies like the Canadian National Railway tend to be relatively safe in tough economic conditions.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

1 Passive-Income Stream and 1 Dividend Stock for $288 in Monthly Income

It can be hard to invest when you don't have any cash, so create some from this passive-income method and…

Read more »

Dividend Stocks

2023 TFSA Contribution Time: 2 Dividend Stocks to Buy With $6,500

Buy these two great dividend stocks in your TFSA as a part of a diversified portfolio if you haven't already.

Read more »