Are you worried about another market crash devastating the wealth you have invested in the stock market? The March 2020 market crash undoubtedly showed Canadian investors why it is crucial to invest in defensive stocks.
The stock market witnessed what we can only call a miraculous recovery after the March bottom. However, it does not mean that the stock market is out of trouble just yet. Another spike in cases across the country combined with economic factors could lead to another market crash.
Fortunately, there are a few stocks on the market that can provide you with stability for your capital and possibly grow your wealth during a volatile market.
Waste not, want not
Waste Connections Inc. (TSX:WCN)(NYSE:WCN) is an excellent example of such a company. Waste Connections collects and disposes trash in several areas throughout the country. Its services include transferring and recycling operations. WCN has expansive operations, and it also generates revenue through the U.S. market.
WCN operates in both large cities and smaller secondary markets. It can continue generating a stable and predictable cash flow. No matter how bad the economy gets, people still need to get rid of their trash. In essence, one man’s trash is another man’s treasure. Waste Connections is proof of that popular saying.
Waste Connections is paying its shareholders at a modest 0.73% dividend yield for its valuation at writing. However, its real value lies in the potential capital gains. WCN is valued at $136.20 per share and is up 14.31% on a year to date basis.
A safe and long-term bet
Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is an integral part of many investor portfolios. One of the most reliable big banks, it is a handsome investment for long-term portfolios. It is also a reliable stock to consider during times of volatility. BNS stands out from its closest peers when it comes to its international operations.
While most major Canadian banks have expanded deep into the U.S. banking sector for growth, Scotiabank is targeting Latin American countries like Peru, Mexico, Columbia, and Chile. Dubbed the Pacific Alliance, Scotiabank has established a significant banking presence in these countries and surged its revenue.
The impact of COVID-19 struck the Pacific Alliance hard, taking a toll on Scotiabank’s valuation. However, the bank has a wide enough moat to continue operating despite the adverse conditions. BNS is trading for $56.43 per share at writing, and it offers a juicy 6.38% dividend yield to its investors.
Adding the stock to your portfolio could help you capitalize on its discounted share price and grow your wealth further through its reliable dividend payouts.
Thinking about the possibility of another market crash is scary. However, the increasing debt crisis and several other economic factors are leading towards the possibility of another meltdown. It would be wise to position your portfolio to weather the market volatility.
Waste Connections Inc. and the Bank of Nova Scotia could be excellent additions to your portfolio for this purpose.
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 BANK OF NOVA SCOTIA.