Many investors are worried about the stock market.
One look at a long-term chart and it’s easy to see why many people think this bull market is getting a little long in the tooth. Sure, we’ve had corrections over the last decade, but none of these really amounted to anything. Stocks sold off and then almost immediately rebounded.
Certain economic indicators are flashing red, too. The yield curve recently inverted, a metric that has traditionally been a pretty accurate recession indicator.
Manufacturing numbers out of the United States also continue to be weak. Central banks around the world are taking various steps to kick-start the economy, which aren’t actions you take when things are rolling along nicely.
Besides, markets are up against new highs, including the TSX Composite Index, which recently surpassed 17,000 points for the first time.
If you’re worried about a recession, take a little while today to position your portfolio accordingly. You’ll be prepared for the worst and sleep better at night in the meantime. Let’s take a closer look at three stocks you can buy to de-risk your personal holdings.
Rogers Communications
Rogers Communications (TSX:RCI.B)(NYSE:RCI) is a great choice leading into a possible recession because of its steady business model, low valuation, and solid dividend yield.
The company is Canada’s largest wireless provider, a communications segment that has evolved from a luxury to a necessity: I know I can’t imagine life without a smartphone.
The company’s other divisions — which include wireline services like TV, phone, and internet, and its media assets — should continue to post steady profits no matter what the underlying economic conditions.
Thanks to a recent sell-off, Rogers shares are the best value they’ve been in years. The stock trades at a mere 13 times forward earnings expectations, which is quite inexpensive compared to its peers. It’s also the cheapest forward valuation I’ve seen from a stock in the sector for years.
Rogers pays a 3.2% dividend, a payout with good dividend growth potential behind it.
Northview Apartment REIT
Even if the economy tanks, people will still need a place to live. In fact, demand for rental real estate might actually increase as nervous consumers delay purchasing property.
This would be a nice boost for Northview Apartment REIT (TSX:NVU.UN), which has quietly grown to become one of Canada’s residential landlords. It owns some 30,000 units from coast to coast, with large pockets of its portfolio focused on Northern Canada and the Southern Ontario markets.
The company has several growth avenues going forward. It continues to make strategic bolt-on acquisitions. It has an active development program and an expanding commercial portfolio that recently surpassed a million square feet of gross leasable area.
Despite slowly growing the company over the last few years, Northview’s debt-to-assets ratio has crept down. That bodes well for further expansion.
The stock also protects investors in two important ways. First, its valuation continues to be less than its peers. And second, Northview pays a nice dividend of 5.4%. That’s an excellent yield compared to other residential REITs.
Empire Company
Grocery stocks are a popular choice for bearish investors. After all, people still have to eat during recessions.
Empire Company (TSX:EMP.A), the parent of grocery brands like Sobeys, Safeway, IGA, Freshco, and, most recently, Farm Boy, is Canada’s second-largest grocer with some 1,500 locations across Canada. It also has significant real estate investments both in retail and residential property.
The company has been transforming itself after it over-extended buying Safeway back in 2014. Costs have been cut, operations have been streamlined, and non-performing stores have been closed. The balance sheet is in much better shape, too.
Operations have really turned the corner. The Safeway acquisition left Empire with a lot of assets in oil-rich areas of Canada, right when these regions begun to struggle.
Numbers have been a lot better lately, including same-store sales increasing 2.4% and quarterly earnings jumping nearly 40%.
Finally, like any good recession-resistant stock, Empire pays a steady dividend. The current yield is 1.4% and the payout has been hiked each year since the 1990s.
