While the World Health Organization (WHO) has yet to announce we are in a pandemic, the state of the S&P/TSX Composite Index may say otherwise. After running up 4% in the first month and a half of the new year, the Canadian market has since dropped 9% over the past two weeks.
What is helping fuel the selloff is the lack of any optimism surrounding the development of a cure for the COVID-19 virus. Investors are acknowledging that there is a strong chance that the worst has yet to come, and they would prefer to be on the sidelines for the time being.
During steep market drops, like those we have been recently witnessing, investors are reminded of the importance of having defensive dividend payers in their portfolios. Dividend Aristocrats may typically underperform the overall market on a yearly basis, but they provided stability and much-needed peace of mind during market downturns.
Brookfield Renewable Energy Partners
A member of the Brookfield Asset Management parent company, Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) is among the top renewable energy providers in the world. With operations in North America, South America, Europe, and Asia, the $12 billion market cap company focuses primarily on hydro, wind, and solar energy.
Brookfield Renewable Partners is a pioneer in the energy industry and is leading the revolution of transitioning to green and renewable energy sources. But solid growth potential is not the only value the company can provide to shareholders.
The global company benefits from a wide economic moat to help maintain a strong market position. In addition, the energy industry has extremely high barriers of entry, reducing the risk of losing market share to potential new competitors.
The dividend is what makes Brookfield Renewable Partners the ideal stock to own during a market downturn. Currently yielding a dividend of 4.13% at today’s price, the company pays an annual dividend of $2.88 per share. The Canadian Dividend Aristocrat recently raised its dividend by 5% and expects to continue to raise it by 5-9% annually over the next five years.
The beauty of the telecom industry is that companies typically earn stable and predictable earnings, regardless of market conditions. Even on the brink of COVID-19 being announced as a pandemic, Telus shareholders can rest easy knowing that millions of Canadians most likely won’t be rushing to cancel their phone plans.
Contrary to some of the other top telecom businesses in the country, Telus does not own a media division. Rather, the company decided to invest in the health industry. Telus Health is at the forefront of the digitization of the healthcare industry, providing digital solutions to hospitals and doctors across the country.
With the entire healthcare industry ripe to grow over the next decade, there is strong reason to believe that the Telus Health can soon become a significant source of revenue for the company.
Currently paying a generous dividend yield of 4.81% at today’s price, a $25,000 investment in the company would earn a $300 payout on a quarterly basis.
Already an established leader in the telecom industry, the healthcare position and dividend yield are two great reasons why Telus shareholders can feel confident in both today’s market condition and the future as well.
Foolish bottom line
While the market is as volatile as it is today, owning reliable dividend payers can add a lot of peace of mind to investors. Neither company may be the most exciting stock, but both are poised to reward long-term shareholders over the next +10 years.
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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.
The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends BROOKFIELD ASSET MANAGEMENT INC. CL.A LV. Fool contributor Nicholas Dobroruka has no position in any of the stocks mentioned.