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3 Stocks to Hold After BoC Backs Off on Rate Hikes

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The Bank of Canada elected to holds the benchmark rate at 1.75% in its March meeting. The Bank of Canada projected weak growth in the first half of 2019. Earlier this year, it warned that trouble in the oil patch would have a negative impact on broader growth. This inspired the BoC to drop its full-year growth projection below 1.5%.

This month, I have covered stocks that should experience positive momentum, as central banks turn dovish. Precious metals are also a nice target with the U.S. Federal Reserve also looking less likely to move on rates in 2019. This trend is recognized across central banks in the developed world, as the rate-tightening path hit a big speed bump last year.

Today, we are going to look at three more stocks to hold in this environment.

Emera (TSX:EMA)

Emera is a Halifax-based utility company. Shares have climbed 13% in 2019 as of close on March 21. The stock is up 20.7% year over year.

As I’d explained in the article linked above, utilities are attractive targets in this low-rate environment. Bond yields were crushed as central banks pursued a policy of historically low interest rates following the financial crisis. Income investors were forced to turn to alternatives. Utility stocks tend to offer a wide economic moat, a solid history of dividend growth, and a decent return to boot.

Emera last paid out a quarterly dividend of $0.5875 per share. This represents a 4.7% yield. The company has achieved dividend growth for 12 consecutive years.

Barrick Gold (TSX:ABX)(NYSE:GOLD)

Barrick Gold is the largest gold producer in the world. Shares have dropped 3.6% in 2019 as of close on March 21. The stock is up 11.4% year over year.

Gold gained huge momentum on the back of market turbulence and the dovish turn from the U.S. Fed in late 2018. U.S. and Canadian stocks have enjoyed a big rally to kick off the year, but the spot price of gold has remained steady. A prolonged pause on rate hikes is bullish for gold, which has struggled in the shadow of a strong dollar since late 2016.

Barrick’s mammoth production will drive growth if gold is able to crack new highs this year. The yellow metal is always volatile, but investors should have exposure in their 2019 portfolios.

BCE (TSX:BCE)(NYSE:BCE)

BCE is one of the largest three telecommunications companies in Canada. Shares have climbed 9.4% in 2019 as of close on March 21. The stock is up 6.1% year over year.

Like utilities, telecom stocks are also an attractive target when bond yields are low. Canada’s top telecoms boast a wide economic moat, and many offer attractive dividends. BCE last paid out a quarterly dividend of $0.755 per share. This represents an attractive 5.1% yield. The company has achieved dividend growth for 10 consecutive years.

BCE is a fantastic pick for investors looking for a high-yield hold right now.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned.

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