3 Stocks to Own During Slow Summer Months

It’s time to protect your portfolio against the slow summer months. Rest easy with stocks like Toronto-Dominion Bank (TSX:TD)(NYSE:TD).

| More on:
Couple relaxing on a beach in front of a sunset

Image source: Getty Images.

Now that the spring has finally arrived, it’s a good time for investors to do some spring cleaning. No, I am not talking about the “sell-in-May-and-go-away” strategy. In case you’re interested, I’ve written about why this is not a wise strategy.

There is one reality that investors should take note of: markets tend to slow down in the summer. The summer is prime vacation time, and investors also tend to take a breather. As such, it’s best to invest in stocks that require little attention.

This is not the time to invest in high-growth, highly volatile stocks. If you aren’t going to be around to monitor your portfolio, it’s best to invest in high-quality, low-volatility stocks.

A top banking stock

History has proven that investors can’t go wrong with an investment in one of Canada’s Big Five banks. My favourite in the space is Toronto-Dominion Bank (TSX:TD)(NYSE:TD).

Toronto-Dominion has outperformed its peers and is expected to post the highest growth rate. It is also a Canadian Dividend Aristocrat and sports the best dividend-growth rate among the big banks.

Trading below its historical price-to-earnings ratio, the bank is cheap. In fact, it is trading at valuation not seen in more than five years. It is the perfect time to add or start a new position.

A top retail stock

Canadian Tire (TSX:CTC.A) is trading at valuations not seen in a decade. The upcoming quarter just happens to be one of Canadian Tire’s busiest. From gardening to power tools, there is a great deal of demand for the company’s products at this time of the year.

Although the company had some logistical issues last quarter, management believes they were contained. In fact, during its first-quarter conference call, it indicated that the second quarter is off to a strong start.

This retail behemoth has one of the widest moats in Canada. Combined with a growing dividend and a high single-digit growth rate, investors can rest easy with Canadian Tire.

A top consumer defensive stock

What is the best sector to own during the slow summer results? That would be the consumer defensive sector. Since 1990, the sector has traded higher 79% of the time, which makes it the best-performing sector in the markets.

Another fact about the summer? Alcohol consumption rises. Andrew Peller (TSX:ADW.A) is one of the fastest-growing players in the industry. Over the past five years, it has averaged 5% annual sales growth and has more than doubled earnings per share.

In 2019, analysts expect growth to be in line with historical averages. That means mid-single-digit sales growth and earnings growth of 30%. Andrew Peller is also a Canadian Dividend Aristocrat, with a 13-year dividend-growth streak.

Foolish takeaway

If you don’t have time to monitor your portfolio over the summer, it’s best to invest in stocks that require little attention. Investors can rest easy knowing that Canadian Tire and Andrew Peller are entering a period of strong seasonality. Likewise, TD Bank is simply best of the best and is one of the safest stocks to own, regardless of seasonality.

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 Mat Litalien owns shares of CANADIAN TIRE CORP LTD CL A NV and TORONTO-DOMINION BANK.

More on Dividend Stocks

thinking
Dividend Stocks

Should You Buy BCE Stock for its 8.6% Dividend Yield?

Down over 20% from all-time highs, BCE stock offers you a tasty dividend yield in 2024. But is the TSX…

Read more »

grow dividends
Dividend Stocks

How Long Would It Take to Turn $20,000 Into $100,000 With TSX Dividend Stocks?

Here's how high-quality TSX dividend stocks and the power of compound interest can help grow your investments by 400% or…

Read more »

Paper airplanes flying on blue sky with form of growing graph
Dividend Stocks

2 Soaring Stocks I’d Buy Now With No Hesitation

These two stocks may be the most expensive on the market, but they're high for a reason! And I'm still…

Read more »

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

Invest $374.50 Each Month to Create Passive Income of $288 in 2024

Investing a specific amount each month to create passive income this year is possible with monthly dividend payers.

Read more »

Happy retirement
Dividend Stocks

2 Stocks to Help Turn $100,000 Into $1 Million

If you want to reach $1 million, $100,000 can certainly get you there. Even if you invest in some low…

Read more »

warning or alert
Dividend Stocks

Income Alert: These Stocks Just Raised Their Dividends

There's no shortage of companies that raised their dividends recently. Here's a trio of options to consider buying now.

Read more »

Business success with growing, rising charts and businessman in background
Dividend Stocks

Don’t Look Now, But These 3 TSX Stocks Look Poised for a Nice Rally 

Three TSX stocks are in a downtrend amid headwinds. 2024 may be rocky for them, but they are poised for…

Read more »

protect, safe, trust
Dividend Stocks

3 Safe Dividend Stocks to Beat Inflation

These three dividend stocks are excellent buys to beat inflation, given their solid underlying businesses and high yields.

Read more »