Every crisis is an opportunity for the well-prepared investor. Now that it appears that the economy is on the precipice of a recession and the market on the verge of a deep correction, it could be time for well-prepared investors to pull out their wallets and scoop up some attractive deals.
Here are the top three Canadian stocks I believe value-oriented investors will regret not buying during this ongoing market crash.
Utilities are probably the most defensive sector in any economy. People need to keep the lights on at home regardless of the economic slowdown or pandemic shutdown. Fortis Inc. (NYSE:FTS)(TSX:FTS) seems like the ideal bet for a defensive investor who’s trying to preserve capital through this storm.
The stock lost only 15% of its value during the financial crisis of 2008. Investors who lived through that crisis remember that even the benchmark indexes fell far more than that, which means Fortis outperformed the market during a historic crisis.
In fact, the company kept boosting its dividend throughout all previous economic cycles. Earnings and margins barely moved even when the economy faltered in recent years. So far, Fortis has declared 47 consecutive dividend raises, which makes it Canada’s most reliable and robust Dividend Aristocrat.
If the market crash persists, long-term investors should certainly consider adding more exposure to Fortis in their portfolio.
Alimentation Couche-Tard Inc. (TSX:ATD.A) is another defensive favorite. Grocery shopping, much like paying for utilities, isn’t tethered to economic conditions, putting this Laval-based grocery chain in a great position for this ongoing market correction.
However, Couche-Tard isn’t the only Canadian grocery chain listed on the market. Canada’s consumer staple sector offers investors plenty of other options. There are two reasons it stands out from its peers: better diversification and a robust growth strategy.
The company owns and operates 15,000 stores across the world, including in the United States, Europe, Mexico, Japan, China, and Indonesia. This makes it a multinational corporation that is less exposed to economic conditions in any particular part of the world.
Usually, when a company is this huge and diversified, it isn’t considered a growth stock. However, Couche-Tard’s acquisition-driven growth strategy has delivered some robust growth numbers over the years and that seems likely to continue for the foreseeable future.
The stock fell 5.5% in February, even as the rest of the market lost much more, which means it is already serving as a hedge for investors.
The telecoms business shouldn’t be impacted by a pandemic or economic slowdown. BCE’s latest quarterly report (Q4 2019) was as robust as expected, and the company didn’t move away from its target of boosting dividends every year. It declared a 5% dividend jump recently and has more than doubled its payout over the past 10 years.
The company dominates Canada’s wireless communications industry and has more market share than any of its peers. Although the company’s debt-to-equity ratio of 1.22 could become a concern if we face a corporate debt crisis, BCE seems better positioned than many of its peers.
It’s another great stock for your market crash watch list.
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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 recommends ALIMENTATION COUCHE-TARD INC. Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned.