The stock market correction that occurred over the past week could become another market crash. Tax-Free Savings Account (TFSA) investors who missed the chance to buy cheap stocks after the March plunge might get another opportunity.
Why Brookfield Asset Management is a buy today
Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) is a leading alternative asset management company with $550 billion in assets under management. The business divisions include real estate, infrastructure, renewable power, private equity and credit.
The firm manages a broad range of public and private investment products and provides services for retail clients and institutional investors.
Brookfield Asset Management finished Q2 2020 with $77 billion in capital ready to invest in new opportunities. The war chest of funds includes $16 billion of cash and $61 billion of uncalled fund commitments.
Due to its size and level of expertise in its core markets, Brookfield is one of a handful of companies that can move quickly to take advantage of deals that come up all over the globe. The pandemic is putting pressure on the firm’s real estate assets, but it is also expected to create fantastic buying opportunities in the next couple of years.
The stock trades below $40 per share at the time of writing, compared to $60 in February. Low interest rates are expected to remain in place for a long time, which should drive up the value of real estate assets once the global economy stabilizes.
Is TC Energy a good dividend stock to buy during a market crash?
TC Energy (TSX:TRP)(NYSE:TRP) primarily operates assets in the natural gas transmission and storage segments. The company also has oil pipelines and power generation facilities. All told, more than $100 billion in assets provide the company and its investors with steady revenue and income.
Energy infrastructure stocks remain out of favour, giving dividend investors a rare opportunity today to buy great companies at cheap prices. TC Energy, for example, recently confirmed it plans to hike the dividend by 8-10% in 2021 and 5-7% per year afterwards. The increases are supported by the $37 billion secured capital program. As new assets go into service, revenue and cash flow should increase.
Warren Buffett’s Berkshire Hathaway invested US$10 billion this year on a natural gas transmission acquisition. The deal suggests that the company has a positive long-term outlook for the natural gas market and for the businesses that move the product from producers to their customers.
TC Energy trades near $52 per share at the time of writing and offers a 6.2% dividend yield. The stock already looks oversold, trading above $75 earlier this year. Further weakness would make it very attractive for a TFSA income fund.
CN stock deserves to be on your radar
Canadian National Railway (TSX:CNR)(NYSE:CNI) is one of those stocks you can simply buy and sit on for decades. It rarely goes on sale, so investors need to act quickly when opportunities arise. This became evident in March when the stock fell with the broader market crash, only to rebound even higher than pre-pandemic levels.
CN plays an integral role in the efficient functioning of the Canadian and U.S. economies. It transports everything from cars, coal, and crude oil, to forestry products, fertilizers, and finished goods. CN is the only North American railway with tracks connecting ports on three coasts.
The business is very profitable and CN generates carloads of free cash flow. The dividend yield is low, but the company has one of the best dividend-growth track records in the TSX Index.
The stock is down from $146 to $132. While that’s still way above the $95 low we saw when the market tanked in March, it’s unlikely we will see CN fall that low again on another market crash. If the stock drifts back to the $125 range, investors should consider adding CN to their TFSA holdings.
The market crash bottom line
Brookfield Asset Management, TC Energy, and CN are all great companies that hold leadership positions in their respective industries. The stocks appear attractive today and should be viewed as top picks in the event the stock market crashes again in the coming weeks.
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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.
The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and Brookfield Asset Management. The Motley Fool recommends BROOKFIELD ASSET MANAGEMENT INC. CL.A LV and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short December 2020 $210 calls on Berkshire Hathaway (B shares). Fool contributor Andrew Walker owns shares of Brookfield Asset Management and TC Energy.