3 Killer Stocks To Buy When the Market Hits Rock Bottom

TSX isn’t out of the woods yet, and the market may see a crash even worse than it saw in March. You can capitalize on the crash by investing in good companies.

| More on:
Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks

Image source: Getty Images.

While the Toronto Stock Exchange is on the road to recovery, there’s a chance that it’s only a temporary reprieve before the market starts absorbing the long-term repercussions of the pandemic. The country is already facing a technical recession, and experts are now discussing how devastating this recession would be as compared to the last one. This is in stark contrast to last year when people were speculating whether there would be a recession in the first place.

The only silver lining of a full-blown recession is the amazing investment opportunities it offers. As an investor, you may want to set aside some funds for investments apart from your safety net. You should also evaluate a few good companies and shortlist candidates.

Today I’ve picked three stocks that you may want to look into if the market hits rock bottom.

An energy stock  

My first pick might seem a bit risky as it’s an oil exploration company. Parex Resources (TSX:PXT) is a Calgary-based crude oil exploration company that owns an interest in approximately 2.7 million gross acres of an onshore production block in Colombia.

The company has only been around for a decade, but the management team is composed of experienced individuals with proven track records.

One thing that stands out about Parex is that it hardly has any debt on its book. This $1.92 billion market cap company has a total debt of just $2.26 million, and the company reported well over $1 billion in gross profits.

The stock is still at a 46% discount and is available for a price of $12.8 per share. Before the crash, it grew its market value by about 167%. This solid growth stock should be on your radar in case of a crash.

An insurance giant

Sun Life Financial (TSX:SLF)(NYSE:SLF) is one of the 10 largest life insurance companies in the world. This Toronto-based firm has a market cap of about $26.8 billion and millions of clients across the globe.

With offices in 27 different markets and about the US $1.1 trillion assets under management, the company has a well-diversified and strong financial reach. The company paid off the US $17 billion in claims just last year.

The market value growth of Sun Life wasn’t explosive even before the crash, but it was steady. It also pays quarterly dividends, which have been increased by 41% in the past five years.

Currently, the company is trading at $43.9 per share. It’s about 30% less then what it was trading for before the crash. It has also brought the yield up to a juicy number of 4.8%.

A real estate company

FirstService Residential (TSX:FSV)(NASDAQ:FSV) is a Toronto-based residential management company. It manages over 8,500 communities containing more than 1.6 million residential units. The operating budget exceeds $7 billion for a year. The company also focuses on technological advancements, software-based service, and green initiatives, giving it an edge in the fast-evolving market.

The company achieved amazing growth in the past five years. Even after the market crash, when its stocks are 22% down, the share price is up 230%. Apart from offering explosive growth opportunity, the company is also a dividend payer. It increased its payouts by 50% in the past five years.

Foolish takeaway

All three companies are still trading at a discounted price. But if another crash comes, the price may slump even further. All three stocks have the potential to strengthen your portfolio, and buying them when they are trading way below their fair value is one way you can use the recession to your favour.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends FirstService, SV.

More on Dividend Stocks

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »

Payday ringed on a calendar
Dividend Stocks

3 Dividend Stocks That Pay Me More Than $54.57 Per Month

These three dividend stocks have done me well over the years, so let's look at how much I've gotten in…

Read more »

Golden crown on a red velvet background
Dividend Stocks

Dividend Royalty: 3 Fabulous Stocks to Buy Now for Decades of Passive Income

Rogers Communications stock and Canadian Natural Resources stock could pay you dividends for decades to come.

Read more »