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Forget Recession: 2 Top Stocks to Buy and Hold

Two “widows and orphans” stocks are among the best the TSX has to offer and are looking like strong investments ahead of a possible economic downturn. Paying stable dividends and carrying low risk, let’s take a look at BCE (TSX:BCE)(NYSE:BCE) and Newmont Goldcorp (TSX:NGT)(NYSE:NEM).

BCE is a defensive buy-and-hold gem

Looking for a strong and a stable return on equity with a 5% dividend yield? BCE ticks these boxes and is also fairly good value for its industry, depending on which market ratios you put the most faith in. A Q2 earnings beat last month put BCE back in the investment headlines. Boasting strong cash flow and high quality, BCE is a safe dividend stock — arguably, one of the safest on the TSX.

Low risk and large cap is the way to play the stock market right now if long-term stability is what you’re looking for.

BCE is also a wide-moat business. Its media segment is strongly developed, while its broadband offerings are arguably the best in the country for speed. From 5G to Crave, the Bell family umbrella is a growth-focused company paying a solid and fairly rich dividend.

Canadian telecom companies are notable for their localized focus. BCE has the Ontario and Quebec markets fully locked down, for instance. This continues with Bell Media’s recent developments in Francophone television, solidifying its standing as a strong, long-range performance stock. With steady revenue growth and expanding profit margins, BCE is a strong play for long-term passive income.

The gold standard in mining stocks

From multi-year highs to one of the worst one-day losses for three years, last week was a roller coaster for gold. Gold prices plummeted Thursday after headway was made in the Sino-American trade war and on encouraging private sector employment data in the U.S., dragging Newmont Goldcorp down 6%. This came after surging prices driven by fears for the global economy that had investors in the yellow stuff gleefully rubbing their hands together.

However, for investors bearish on the global outlook, a reversal of fortunes could be on the way. Should talks between Canada’s two biggest trading partners go nowhere and a messy no-deal Brexit perturb the global economy, gold could likely soar again. Even a strong U.S. economy can’t stave off a gold rally should other international headwinds keep blowing in the direction of the TSX.

That’s why now is a good time to snatch up relatively cheap shares in your favourite gold stocks if buying and holding high-quality miners is part of your financial strategy. An outstanding balance sheet and good earnings outlook makes Newmont Goldcorp a solid buy. Its moderate 1.45% dividend yield isn’t bad for a mining stock and has the potential to grow as time goes by.

The bottom line

These two top TSX stocks could satisfy a long-term, low-risk investor. From fair valuation to decent yields, both stocks exhibit the kind of high quality and healthy cash flows that make for a reassuring investment for the long term, especially in the current uncertain economic climate.

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Fool contributor Victoria Hetherington has no position in any of the stocks mentioned.

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