Long-term investors looking for macroeconimic trends have a range of options for capital appreciation in highly defensive growth areas. Today we’ll review three stocks drawn from three growing sectors: Space, renewables, and food security.
Renewables are a lucrative long-range trend
Northland Power (TSX: NPI) is a strong play for exposure to the green energy megatrend, and especially thermal and wind power, an area with greater power capacity potential than nuclear. Spurred by oil volatility and the growing call for less environmentally impactful than traditional fossil fuel power production, renewables is a lucrative long-range play for growth.
Northland in particular makes for a key green energy stock to add to a passive income portfolio with its dividend yield of 4.55% and defensively diversified areas of power production. It’s been popular this week, averaging a 3.5% gain for the last five days at the time of writing.
Food security is a defensive long-term play
Nutrien (TSX: NTR)(NYSE: NTR) pays a dividend yield of 3.63% and commands an unassailable position as the world leader in potash production in terms of capacity, with a 20% world market share.
It’s the largest agri supplies retailer in the U.S., and is also active in the production of phosphate and nitrogen-based fertilizers. In short, it’s one of the most defensive stocks on the TSX and a solid dividend payer to boot.
What makes Nutrien a key part of the future of the TSX is its strategic role in food security. Along with energy production, food is one of the most defensive areas of investment, with wide-moat businesses that pay dividends a solid place to either begin a new stock portfolio or add backbone to an existing one.
As such, Nutrien could be considered the godfather of the consumer staples space.
Space investment is a high-risk, high-reward strategy
Maxar Technologies (TSX: MAXR)(NYSE: MAXR) is a so-called event-driven investment in that its momentum is often generated by news items. For instance, the space tech stock jumped 8% this week as news broke of a key deal with the Air Force Research Laboratory.
While this development makes Maxar a buy for investors sizing up the potential for geopolitical tension as a driver of income, the stock is also a must for space bulls.
What makes Maxar a pure-play for space tech? A high-risk, high-reward momentum stock ideal for farsighted capital gains investors, Maxar already has key partnership deals in place with NASA that take the tech stock beyond the new USAF Matriel Command deal and aim it literally at the moon.
The news back in May that NASA had chosen Maxar to work on its lunar Gateway project boosted the stock by more than 8%.
The bottom line
While space tourism and industry, including mining, space internet and other commercial activities, provide endless upside potential, investors with their feet on the ground also have strong plays in renewable energy and food production.
Nutrien, Maxar and Northland form a farsighted trio of stocks that a super-long-range investor could consider stashing in a “big sky” portfolio with the widest of financial horizons.
