The stock market crash that occurred during mid- to late March dragged stocks to low levels. While some stocks have recovered to be near their early March levels, markets are still largely down across the board.
Plus, with loads of uncertainty still abound, there’s likely be volatile and red days ahead for stocks. However, the Foolish investor with a long-term outlook can find ways to profit off a market crash.
One such solid strategy is to scoop up cheap shares of blue-chip stocks during a downturn. For long-term investors, when blue-chip stocks are dragged down in a market crash, they’re simply on sale.
However, the investor must be able to choose stocks of truly healthy companies and not chase the stocks of companies in trouble that only appear to be cheap.
Today, we’ll take a look at one blue-chip TSX stock that has fallen to attractive levels with the market crash.
It is by far the largest Canadian telecom stock by market cap. Its premier services and infrastructure are what set it apart from its competition in the space.
BCE is already well positioned as an industry leader. However, it’s still being very proactive in expanding its reach and adapting to new times, even during a market crash.
For one, it has recently announced an acquisition that will benefit the company’s media positioning. It’s buying a large television and media company in Quebec to expand its Bell Media operations in that province.
Plus, BCE is also going to be the exclusive partner of Quibi, a new mobile video media platform. This platform allows customers to consume short, stream-based content on the go.
With this move, BCE is looking to adapt to its user base, as people are starting to consume media in more non-traditional ways.
BCE: A market crash buy?
As of writing, BCE is trading at $58.24 and yielding 5.69%. This obviously isn’t as cheap as its March 23rd low of $46.44, but consider that the stock was trading at $63.59 as recently as March 4.
With that yield, an investor could rake in over $1,100 in dividends in one year with a $20,000 investment.
Clearly, the stock has taken a hit with the recent market crash. Plus, regulatory changes made earlier this year are hamstringing BCE’s ability to bring prices up on its phone plans.
However, sentiments around BCE for the long term should still be largely positive. This is because of the reasons shown above, and because with industry-leading infrastructure, BCE is poised to set the pace when 5G networks roll out across Canada.
If the release of 5G makes customers even more data hungry, then the price restrictions on mid-range plans may be inconsequential to BCE, as customers will want to bump up to higher limit, or unlimited, data plans anyway.
Market crash strategy
Investors focused on the long term can find buying opportunities in today’s market. One blue-chip stock that seems attractive for the long term is BCE.
It currently offers an outsized dividend yield and is positioning itself well to build for the future. If you’re looking for a high-yielding, blue-chip stock to pick up for cheap, consider adding BCE to your shopping list.
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 Jared Seguin has no position in any of the stocks mentioned.