While it makes sense that some of the steepest positive momentum this week has been generated by pharma stocks, a vaccine could still be a ways off. There is a chance that it could be months, or perhaps even next year, before a successful vaccine is widely available. Even then, there is the possibility that the vaccine will have to be a seasonal shot that people will have to take regularly.
The latter consideration means that a full social recovery is unlikely to be clearly delineated. As we have seen in Canada, COVID-19’s spread has been uneven; any recovery from it is likely to be similarly irregular. Investors may therefore want to settle into “the new normal” of long-term reduced operations across multiple industries. Elements of the “stay-at-home” model could be with us to stay.
Content-streaming stocks are solid
There are numerous reasons why BCE (TSX:BCE)(NYSE:BCE) belongs on a top stock watch list. From its tasty 5.6% dividend yield to its rough third of the wireless market share, BCE is a strong play. But perhaps one of the best reasons to buy BCE is for the disruption that content streamers are causing to the entertainment industry. Look at AMC’s expected US$2.4 billion Q1 loss as an indicator of how much diverted revenue is out there.
Rogers Communications is a similar play to BCE, but with a few key differences. For one thing, Rogers allows access to some of our biggest cultural icons. From the Raptors to the Maple Leafs to the Rogers Centre itself, this name belongs on every TSX investor’s wish list. With Rogers paying a 3.4% dividend, though, BCE has a better yield; the latter stock also boasts the stronger recent performance on the markets.
Home shopping stocks are outperforming
With its earnings beat and mid-pandemic relevance, Shopify (TSX:SHOP)(NYSE:SHOP) has generated plenty of stenography in the last few months. However, it must be said that not only is this arguably Canada’s greatest business, it’s also well placed for years of growth. Shopify could very well be the next Amazon — a stock that Warren Buffett famously missed out on.
Investors still have some upside to squeeze from Shopify, with a high target of $1,190. However, the value investors out there may want to wait for the varnish to chip on this one before starting, or increasing, a position. With a low target of $441, though, the bottom is certainly a long way off. A better play than betting the farm, therefore, might be to feather the nest slowly, buying smaller packets of shares on down cycles.
Loblaw and Alimentation Couche-Tard round out this list of key stay-at-home stocks. Both names are central to the TSX consumer staples segment, and each pays its own dividend: 1.85% and 0.63%. However, while these two grocery stocks appear similar on the face of it, they each have their own strength: Loblaw is especially well diversified across asset types, for instance, while the other stock packs strong geographical spread.
