3 Stellar Investments to Counter Volatility

Concerned with market volatility? These three stellar investments offer income- and growth-seeking investors stability and much more.

| More on:
Volatile market, stock volatility

Image source: Getty Images

As much as the market appears to be moving again in the right direction, there’s still plenty of volatility. Many of the best-performing stocks are still trading at discounted levels. Further to this, some of those stellar investments also provide juicy dividendS for investors.

Here’s a look at a few of those investments to augment your portfolio.

Safety: Look for your essentials

One of the most overlooked aspects of investing in this economy is selecting investments that cater to necessities. Luxury retailers and restaurants may be shuttered, but grocery stores, utilities, and telecoms are open. Not only are these investments stable now, but many of these stocks also have a defensive appeal beyond the current slowdown.

One example of this is Fortis (TSX:FTS)(NYSE:FTS). As one of the largest utilities on the continent, Fortis is charged with keeping the lights on for millions of subscribers. The company’s reach extends across the U.S., Canada, and into the Caribbean, providing a diversified stream of recurring revenue for investors.

While many stocks and the market itself are still posting double-digit losses in 2020, Fortis has emerged from the recent pullback and boasts a 2% gain year to date. Throw in a stable (and growing) quarterly dividend that pays out a respectable 3.49% yield, and you have a stellar option.

This stellar business is full of waste

Speaking of overlooked businesses, let’s take a moment to mention Waste Connections (TSX:WCN)(NYSE:WCN). No matter how bad the economy gets, people will always generate trash. Waste Connections has a growing list of clients across the U.S. and Canada to collect that trash. This stellar investment option operates in both exclusive and secondary markets, providing both growth opportunities and a growing base of revenue.

By way of example, during fiscal 2019, the company had an operating cash flow of $1.54 billion. During that year, Waste Connections spent $400 million on acquisitions, meaning exposure to new markets and establishing new revenue streams. For fiscal 2020, the company had earmarked $500 million towards acquisitions.

Like Fortis, Waste Connections has finally pushed into positive territory during 2020. As of time of writing, the company is hovering north of 4% for the year. In terms of a dividend, Waste Connections currently offers a 0.85% yield. While this may resemble more of a rounding error to income-seeking investors, Waste Connections has provided ample annual or better bumps to that dividend.

In short, buy this stellar option and watch it grow.

A great pick for online investors

Perhaps the most overlooked aspect of this new norm of remote working and home-schooled children is connectivity. Networks are jammed with video conferences, calls, and projects stemming from a growing number of connected devices. For BCE (TSX:BCE)(NYSE:BCE), this may just be business as usual.

BCE is one of the largest telecoms in Canada, offering internet, TV, phone, and wireless subscriber services. That subscriber base provides a diversified and defensive revenue stream that should appeal to nearly any investor. But why should you invest? There are three points to consider that make BCE a stellar option.

First is BCE’s wireless segment. Wireless devices have grown in importance in recent years. Cellular internet access and data-hungry apps were cutting edge a decade ago; today they’re the norm. As the next generation of devices gets released, it ushers in a new suite of data-hungry apps that drive wireless revenues higher.

Next, there’s the defensive aspect I hinted at above. The need for internet access is increasing exponentially in this pandemic, and not just from the wireless segment. This growing necessity has only increased the already defensive appeal of BCE, which is not going to change anytime soon.

Finally, let’s talk dividends. BCE offers a quarterly dividend that currently works out to an appetizing 5.84% yield. Even more impressive than that yield is the fact that BCE has maintained annual bumps to that dividend for over a century. This fact alone makes BCE a stellar investment for income-seeking investors.

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 Fortis Inc.

More on Dividend Stocks

Double exposure of a businessman and stairs - Business Success Concept
Dividend Stocks

3 Evergreen Investments for Beginners

Choosing leaders from industries that consistently perform well regardless of the market conditions is one of the simplest ways of…

Read more »

Retirement
Dividend Stocks

Passive Income: Buy Dividends to Rule Your Retirement

You can establish a passive-income stream by investing in high-dividend ETFs like BMO Equal Weight Banks ETF (TSX:ZEB).

Read more »

consider the options
Dividend Stocks

Magna Stock: Is a 3% Dividend Yield Enough to Make Investors Stay?

Magna (TSX:MG)(NYSE:MGA) stock has grown 8% in the last week but is down over the last year. So is a…

Read more »

Close up shot of senior couple holding hand. Loving couple sitting together and holding hands. Focus on hands.
Dividend Stocks

Retirees: How to Stay Calm in Market Downturns

Are you losing sleep because of market volatility? Here are three tips that should give you peace of mind.

Read more »

Index funds
Dividend Stocks

Buy the Pullback: 2 Top TSX Dividend Stocks for RRSP Investors

The drop in the TSX Index is giving RRSP investors a chance to buy top dividend stocks at cheap prices.

Read more »

Dividend Stocks

2 Stable REITs for $177 in Monthly Income

These two REITs offer stable income you can bring in each month but also have valuable numbers for investors wanting…

Read more »

funds, money, nest egg
Dividend Stocks

3 of the Best Dividend Stocks to Combat Inflation and Rising Interest Rates

Suncor, TD Bank, and Tourmaline are dividend stocks benefitting from rising inflation and rising interest rates.

Read more »

Community homes
Dividend Stocks

Housing Correction of 20% Could Come in 2022: How to Prepare

A housing correction of up to 20% could be coming thanks to inflation and interest rates, but there are other…

Read more »