While most Foolish readers will already be familiar with the pitfalls of attempting to “time the market” there’s no question that we’ve seen a rising tide of economic threats looming on the horizon over the course of the past couple of weeks.
Fatiguing trade talks between the U.S. and China continue to create an overhang over business leaders, preventing them from being able to plan and make investments towards future growth.
Meanwhile there’s still the issue of Brexit to be sorted out later in the year, and oh yeah, the yield curve inverted for a short-time last week, an event that’s preceded each of the past seven economic recessions.
And while it certainly won’t help anyone by over-reacting in response to any of the aforementioned events, it’s probably at least a good time for investors to be looking at the markets from a slightly more cautious perspective.
These three companies are solid candidates to begin with, as defensive vehicles for investors to park their money in until the outlook improves.
Loblaw Companies Ltd (TSX: L) is Canada’s largest retailer by market capitalization, owing both the Loblaws supermarket and Shoppers Drug Market franchises, and as such representing a sizeable chunk of Canadian’s everyday household spending.
Most of what Loblaw’s retails are everyday necessities, so even in the event of a market downtown, the company should probably do just fine.
Meanwhile for those investors seeking even greater exposure to Canada’s retail landscape, Choice Properties Real Estate Investment Trust (TSX: CHP.UN) a recent spin-out from Loblaw is Canada’s largest retail REIT, owning the majority of the aforementioned companies real estate properties.
CHP stock also yields shareholders 5.39% annually, considerably better than L’s current 1.75% payout.
Regulated utility provider Fortis Inc (TSX: FTS)(NYSE: FTS) is another company that should appeal to defensively-minded and income-oriented investors.
Fortis shares are currently paying out 3.31% dividend but with plans to raise its payout by 6% per year between now and 2023 the forward yield on this stock is actually considerably more than its printed number.
The fact that over 99% of this company’s business is tied to regulated utility assets means that investors won’t have to worry about much in the way of surprises here either.
Last but certainly not least is Brookfield Renewable Partners (TSX: BEP.UN)(NYSE: BEP) which is currently yielding shareholders a 5.33% annual dividend.
Like Fortis, BEP isn’t really exposed much to what’s happening in the broader economy as most of its contracts are fixed and long-term in nature, and thus mostly insulated from economic shocks to factors like GDP growth, inflation and interest rates.
However in addition to a solid plus-5% dividend yield investor in BEP also get the potential upside from exposure to growth in renewable energy contracts.
BEP has plans to raise its payout by at least mid-to-high single digits over the next couple of years making this a prime candidate for long-term investors TFSA accounts and even RRSPs.
