The health crisis is fast becoming a financial crisis. The spread of COVID-19 could see a profound reorganization of major institutions with social distancing becoming the new normal. Pundits had long been eyeing the end of the bull market. The bear market was an inevitability, and analysts knew that it would be a nasty one. A recession was baked into the markets. Now it looks as though another Great Depression could be imminent.
Investors should buy great Canadian stocks that have social distancing built in. One way to invest is to carry on buying shares in the favourite companies. But rather than make emotional purchases, investors should watch what the markets are doing. A number of names have really stood out since the start of the coronavirus market crash. Let’s take a run through of some of the best.
How to buy for the social-distancing market
Social distancing is likely going to last more than a few weeks. Indeed, it’s likely that a large proportion of business will now be conducted online. That’s why stocks like Loblaw Companies are such strong buys right now. Combine the online partnership with Instacart with consumer staples defensiveness, and you have a stock for our times.
BCE is an especially strong play that’s resilient to the market crash. These days, everything is about the quarantine culture sweeping the world. Folks are hanging out online and watching increasing amounts of online content. BCE is a strong play for these activities. The stock holds a third of the market share with 10 million wireless customers and general Eastern Canada dominance.
BCE has fallen by less than 5% in the last three months. Its mix of wireless communications, internet connectivity, and in-home entertainment have struck a chord with investors. New long-term dividend portfolios should be built around social-distancing preparedness, packing names like BCE. A 5.7% yield makes this strongly diversified and recession-resilient name a strong, wide-moat buy.
Buying stocks for an online, indoor world
Shopify is the ultimate Canadian tech stock, meanwhile. The online store platform has become something of a heroic ticker since the coronavirus began ripping up the stock markets. The top tech stock is a growth investor’s ideal play, with 434% returns expected by 2023. Cloud-based e-commerce is looking set to be big business in the coming years, and Shopify’s projected 40% annual earnings growth seems realistic.
Canadian Apartment REIT pays a 3.3% dividend yield and supports a social distancing-ready portfolio. Apartments are a whole lot of people’s entire worlds right now. Rent is an essential outgoing, assuring REITs’ revenue streams. Rents may come down naturally in the short-term, but his should be absorbed by the real estate sector, which was long due a correction. CAPREIT remains a sold play.
The bottom line
Loblaw is a strongly diversified stock that is becoming increasingly popular. Shopify is a strong capital gains play on a related theme. Apartment REITs are one of the classic safe havens of defensive investing, while BCE is a top dividend stock for communications and media exposure.
