There’s a growing concern that the economy may be starting to show signs of slowing down. Talks of interest rate cuts are popping up, and slowing home sales have people worried that maybe things won’t be so rosy in the near future. However, you can protect yourself by investing in these three recession-proof stocks.
Waste Connections (TSX:WCN)(NYSE:WCN) is one of the best examples of a stock that has constant demand and that is in no danger of running out of work. Especially with Canada having a garbage crisis with too much to dispose of, it’s really hard to image a scenario where Waste Connections shouldn’t see strong sales. The predictability and consistency of demand will help ensure that the company’s top line won’t see significant drops and fluctuations.
Whether the economy is doing well or not, Waste Connections is a good bet to continue rising in value over the long term. In five years, its share price has risen by more than 230%. The company has seen tremendous sales and profit growth over the years, and there are still many opportunities for Waste Connections to continue to grow.
It’s great stock to buy and hold for decades given the stability that it offers investors.
National Bank of Canada (TSX:NA) may not be one of the top five banks, but it’s still a great bank stock to hold. With strong and growing revenues along with a good profit margin, it offers investors everything they would expect from a top bank stock. While there might be declines in the economy, this is also a company that can offer investors a lot of consistency.
Both banks and consumers require banking for their day-to-day needs in both booming times and recessions. And regardless of economic downturns that may happen over the short term, over the long term, we’re likely to see continued growth from rising fees and a growing population. Investors of National Bank will also benefit from a dividend of around 4.3% per year and one that’s also likely to increase in future years as well.
While it might not have the same great growth prospects that Waste Connections does, National Bank is still a good buy for investors looking to buy and hold.
Hydro One (TSX:H) is another company that investors can expect a lot of consistency from. Utility providers don’t have to worry a lot about finding new sales as their customers are often repeat business and need to use the services to keep the lights on and to stay warm.
Whether interest rates are up or down, if trade wars are taking place, people are going to need a utility company’s services. And that’s why Hydro One is a terrific stock to hold. It has strong fundamentals and plays an important role in the day-to-day lives of residents in Ontario.
It too pays a dividend of around 4.2% per year and would give investors lots of opportunity to benefit from both dividend income and a rising share price. In just the past 12 months, Hydro One’s stock has risen by more than 14%, and it’s still a good value buy, trading at just 1.5 times its book value.
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 David Jagielski has no position in any of the stocks mentioned.