In the last few weeks, stock markets around the world have caught everyone’s attention. It’s not so surprising that we have seen a market crash. Especially since we haven’t seen one like this on a global scale for over a decade.
It also isn’t a surprise given what’s going on around the world. The sudden closures of businesses all at once is a major shock to the financial system. However, doing this sooner rather than later could prove to be the best choice. By acting fast and shutting everything down immediately, we can limit the spread of the coronavirus, and these businesses will be able to open quicker once the virus is under control, limiting the impact to the economy in addition to preserving everyone’s health.
Whether we can get through this quickly or things remain uncertain for a prolonged period, eventually the economy will recover. That means this market crash and these discounts in stock prices won’t last forever.
It can be a difficult choice to buy stocks in these market crashes, as many people may be worried about buying too early when stocks may continue to fall.
And although that wouldn’t be ideal, it wouldn’t be the worst-case scenario. The worst thing you can do would be to wait too long and miss these discounts all together.
So, make sure once you have decided on the stocks you want to own for years and considered them to be of fair value, you pull the trigger and are happy with what you bought.
Enbridge’s main business is its pipelines, but it also provides a number of other services, making it an energy infrastructure company.
Its pipelines have major capacity, and liquids and natural gas combine to make up roughly 75% of Enbridge’s business. It also gets a considerable portion of its revenue from gas and electric distribution.
Enbridge’s business is extremely important to the Canadian and North American economy. And because its revenues are so stable, Enbridge is one of the top dividend-paying stocks on the TSX.
Less than 5% of its business is exposed to commodity prices. In addition, 17% of its revenue comes from regulated assets.
One of the main reasons investors love the stock is for its dividend. As of last Friday’s close, Enbridge’s dividend was yielding a whopping 8.75%. That’s an extremely attractive dividend, especially when you consider that’s at an estimated payout ratio of just 69%.
Plus, the stock is well undervalued; investors can gain exposure at just 14 times earnings.
BCE is another top business similar to Enbridge. The company is key to communication around Canada, with one of the top mobile networks in the country.
BCE has also made considerable investments in fibre, building out its fibre-to-the-home network. This is a major step and should help BCE to gain market share in the near term. In addition, with the rollout of 5G, it will keep BCE better prepared to handle the network with its impressive infrastructure.
The company’s dominance doesn’t end there. Its media business is also an industry leader, completing the impressive diversification of BCE. The strength in each segment helps to grow BCE’s overall brand in addition to helping the company to drive sales across its businesses. And the impressive growth that BCE continues to achieve allows the company to pay a large portion of its earnings out.
As of last Friday’s close, BCE’s dividend was yielding more than 6.4%. Plus, the stock was trading at just 15 times earnings.
Not only are these stocks high-quality business and reliable dividend payers, but both stocks are also extremely undervalued, giving investors a major opportunity to gain some exposure.
You won’t want to miss out on investing in these two industry leaders this cheap. Or you’ll be kicking yourself throughout the next bull market, as these stocks reach new highs and continue to grow their dividends.
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Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.