There is so much uncertainty these days, and many TSX stocks are extremely vulnerable to another selloff, especially at these price levels.
While selloffs are generally welcome, as they give us the chance to buy high-quality stocks for super cheap, but it could impact our current portfolio. Investors may therefore want to reposition ahead of time and add some more defence to your portfolio.
The key is to do this ahead of time, as waiting until the market crashes could prove to be devastating.
When looking for recession-proof businesses, there are a few qualities to look for. First, a business in a recession-proof industry. This industry won’t see a huge hit to sales, despite aggregate income levels falling. Some top examples are TSX utility stocks.
Other important qualities include the financial position of the company. It’s crucial that the business is in a good financial state and doesn’t have any pressing financing concerns in the near term.
Finally, you want to look for high-quality TSX stocks that have proven to be top performers. This is important because, with all the uncertainty, you want to make sure that the companies you’re invested in can be trusted to protect your money. Furthermore, the best companies will not only find a way to weather the current environment but find any way to take advantage.
Here are two stocks to consider today.
Consumer staple stock
One of the top TSX stocks to buy anytime, but especially during this uncertainty, is Alimentation Couche-Tard Inc (TSX:ATD.B). Alimentation owns thousands of convenience stores and gas stations all around the world. It’s one of the best stocks on the TSX with all the qualities of a top long-term investment.
First, its industry is ideal in regular recessions. During the shutdowns, however, it was impacted more than a regular recession. This is to be expected as fewer people driving to work and forced to stay home means less fuel demanded. Despite this, the company has shown that it can find cost savings and stay robust.
In its most recent quarter, Couche-Tard even managed to post a 48% increase in earnings per share over the same quarter last year.
Furthermore, its financial position is very strong, and the company is well capitalized. Plus, on top of that, because it’s in such a strong financial state, Couche-Tard is in a position to look for acquisitions if some of its competitors become distressed enough.
This brings us to the last point. Couche-Tard has done this before and can do it again. Not only has this top long-term stock proven it can weather anything that’s thrown at it, but it’s also proven it can use opportunities like this to improve its market share and come out the other side a stronger company.
So at just over $45 per share, Couche-Tard is one of the best stocks to buy today.
Top renewable energy stock on the TSX
Another great stock to consider buying in this environment is Brookfield Renewable Partners L.P. (TSX:BEP.UN)(NYSE:BEP).
Just as Couche-Tard the first important quality of Brookfield is it operates in a growing industry. Renewable energy stocks are generally defensive for a few reasons. First, they sell electricity, something that (apart from environmental factors) generally has sticky demand.
Plus, these companies sign lengthy power purchase agreements, ensuring that revenue stays consistent.
Brookfield is one of the top investments in the industry. Furthermore, it’s by far the biggest company, with assets all over the globe. This diversification is key to lowering risk even further for investors.
Financially there is nothing to worry about with Brookfield. The stock is one of the most respected names on the TSX that always has investor appetite. And the company is known for finding high-quality investments, especially in distressed companies.
So if you’re looking for a business that can take advantage of any potential opportunities in a future market crash, Brookfield is one of the best companies to bet on.
At just over $70 a share, the stock is nearly 10% off its high. Plus, it offers an attractive dividend yielding more than 3%.
This value, income, and growth potential make Brookfield a triple threat stock and one of the top stocks to buy today.
