Investors are becoming restless because the market is acting strangely. The TSX rallies one day then falls sharply on the next trading session. A couple of days to a week-long advance is already a bonus.
In a bear market, your investments will decrease in value regardless of the stocks you hold. However, you won’t be as agitated if you have high-quality assets in your portfolio. Bank of Montreal (TSX:BMO)(NYSE:BMO) and Canadian Tire (TSX:CTC.A) are blue-chip stocks you can hold through thick or thin.
Both companies have the tenacity to endure downturns, a recession, or even the COVID-19 pandemic. If you’re prepared to invest despite the risky environment, you should consider this combination. The share prices are too cheap to ignore.
Pioneer in dividend payments
BMO is down to $66.89 per share, which is nearly 33% off its year-end 2019 price. Income investors can rarely get a bargain as good as this. The bank has an impressive dividend track record of 191 years.
Some companies that were known as rich dividend plays before the coronavirus outbreak are slashing or suspending dividends. The cuts are meant to compensate for the dwindling cash flows and preserve precious liquidity. BMO isn’t likely to break its unbeatable record. You’ll continue to earn passive income from its generous dividend yield of 6.42%.
This $42 billion bank is not only the fourth-largest lender in Canada but also the oldest bank in the country. It’s also among the top 100 banks in the world. But BMO wasn’t spared by the market sell-off.
Banks have been navigating a low-interest-rate environment for some time. Now, BMO and other banks have to deal with the impact of COVID-19. Still, BMO is one of the safer names to buy during the 2020 pandemic.
Strong and loyal customer base
The long-time strategy and focus of Canadian Tire is to pay and grow dividends. This $6.11 billion company is also reeling from the novel coronavirus outbreak. As of this writing, the stock is trading at $94.11, which is 32.1% lower than when 2020 started. The current dividend yield is 4.81%.
Still, this blue-chip stock remains one of the top choices of income investors in the retail space. Even with the temporary closures of some stores and reduced hours in others, Canadian Tire commands customer loyalty.
Over the years, the company has been benefitting from the “untiring” patronage of its huge customer base. It’s also one of the major reasons why the company continues to be resilient. COVID-19 is keeping customers at home but its e-commerce business is compensating and experiencing a significant increase.
Likewise, the curbside pick-up service is addressing the demand for same-day shopping while maintaining a physical distance. For now, Canadian Tire is reducing operating costs and working capital to preserve its cash position. The moves will enable the company to have financial flexibility and not cut dividends.
The market sell-off is causing panic and confusion. It appears investment choices are scarce. But smart investors know better. When blue-chip stocks can be had at cheap prices, you can’t simply pass up an excellent buying opportunity.
Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.
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 Christopher Liew has no position in any of the stocks mentioned.