The carnage on global markets continues to fuel investor fears. This can be a scary time for less-seasoned investors. Fortunately, more established investors remind us frequently that markets will and do recover, and adding one or more defensive stocks can help.
The current sell-off has exposed a number of top defensive stocks, some of which are trading near 52-week lows. Here are several incredible investments to consider.
A century-long history of dividends? Yes, please!
There’s no denying that the current coronavirus pandemic is unprecedented, and it will alter our lives for the foreseeable future. This makes picking a solid dividend stock to augment your portfolio all that much more important.
Enter BCE (TSX:BCE)(NYSE:BCE), one of the largest telecoms in Canada with a history of paying out dividends that spans over a century. That period includes world wars, health crises, recessions, and countless other life-altering events. BCE weathered all of them, and today this top defensive stock provides an ample 5.97% yield.
Why is BCE a great investment right now? BCE’s booming wireless segment has become a must-have necessity in our digital world. This creates a defensive moat that is elevated further when considering BCE’s impressive media arm that feeds content to those devices. In the most recent quarter, BCE added 123,000 net new wireless subscribers to its network.
BCE currently trades at just below $52, just over $2 above its 52-week low.
Don’t ignore this energy sector titan!
Enbridge (TSX:ENB)(NYSE:ENB) is an energy infrastructure company that every investor should be well aware of. Enbridge operates a pipeline network that provides a considerable portion of U.S.-bound Canadian crude and natural gas to the U.S. market. While that may be an impressive fact, what exactly makes Enbridge a good investment right now?
Enbridge’s volume-based pricing for use of its pipeline network ensures that it remains largely immune to recent price fluctuations. Additionally, the sheer size of Enbridge’s network adds a defensive element that few peers can match. In other words, there will be a continued need for the gas and oil that traverses Enbridge’s network.
In terms of a dividend, Enbridge offers a quarterly distribution that pays out an impressive 8.50% yield. Prospective investors should note that Enbridge currently trades at a discount of just under $40. That current price is far off from its 52-week high of $57.32 set just a few weeks ago.
Bank on this defensive company
Banks are some of the first companies to feel the financial pinch in a downturn. Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is no exception to this, but the company does have plenty of advantages in its favour.
Apart from being one of the largest banks in Canada, TD also has a large presence in the United States. The bank has an impressive network of branches that stretches from Maine to Florida. That branch network is well known for providing a sense of community to customers that is often lacking with other banks today.
TD’s longer hours and emphasis on the customer have helped establish TD as one of the largest banks in the United States. That growth has fueled strong deposits and loans, ultimately leading it to be a top defensive stock.
TD has risen from its 52-week low of under $50 in the past week and currently trades near $56. TD’s 52-week high hit $77.96.
This defensive investment is pure gold
When uncertainty hits the markets, traditional investors flock to gold. As a store of wealth, gold has attracted investors for thousands of years. Unfortunately, you can’t buy groceries in bullion, and traditional miners are often too risky for some investors. The solution is to consider a streamer such as Wheaton Precious Metals (TSX:WPM)(NYSE:WPM).
Streamers exchange an upfront investment in a mine for the option to purchase extracted metals from the mine at a discounted price. That discount is often significant and allows the streamer to move on to the next opportunity with haste. By way of example, Wheaton has 20 active mines on three continents, which includes not just gold, but a variety of precious metals. Wheaton also offers a respectable 1.64% yield on its dividend.
As a testament to the defensive nature of Wheaton, the company is still in the black over the past one-month period. The current stock price of $39 is still closer to its 52-week high of $45.
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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.
Fool contributor Demetris Afxentiou owns shares of Enbridge. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends Wheaton Precious Metals.