Every investor has their own investment goals. Some are looking to grow their wealth in a short amount of time, and they are willing to risk losing their capital to do that. Others might want safe and predictable long-term growth. The first group of investors cherish market crashes, which offer rapid growth and recovery opportunities, while the second kind of investors fear a crash, since they can weaken their investment portfolios.
Ideally, you should have a balanced investment approach. You should be willing to take some risks if you want to expedite the growth of your investment portfolio, but you might also want to add some safe stocks that can keep your portfolio afloat during market crashes.
A utility aristocrat
Fortis (TSX:FTS)(NYSE:FTS) is one of the most dependable and consistent dividend aristocrats on the TSX. It has been increasing its payouts for 46 years, but it’s not just the dividend streak that makes it a super-safe stock. Fortis is a utility company that provides electricity and gas to millions of Canadians and Americans. And since utilities are part of the core necessities of a household, Fortis’s revenue stream is very safe.
Many blue-chip stocks like Fortis either stagnate when it comes to capital growth or offer a paltry yield. Fortis does neither. It is still growing its market value quite steadily, and the 3.8% yield is decent enough. The balance sheet is strong, the revenues are secure, and the company is shifting its focus towards green energy, which means it’s poised for further growth in the future.
A food retail company
Whether it’s a small market crash or a full-blown recession, everyone has to eat. This is one reason why most food-related businesses are considered safe against market crashes, and Empire Company (TSX:EMP.A) might be one of these businesses. After the last crash, it took the company barely two months to reclaim its pre-pandemic valuation.
This Nova Scotia-based company focuses on food retailing, groceries, and real estate related to the food business. The company has been growing its sales, net earnings, and EBITDA at a considerable pace for the last 10 years. The market value has grown at an incredible pace in the last three years, and it has grown its dividends for 25 consecutive years.
A waste management company
Waste management is an ever-green business, as proven by the consistent growth of Texas-based Waste Connections (TSX:WCN)(NYSE:WCN). In Canada, the company is headquartered in Ontario. The company provides solid waste management and disposal services in the U.S. (42 states) and Canada (six provinces). It’s also a dividend aristocrat and has increased its dividends for 10 consecutive years.
The company doesn’t offer a generous yield, but its growth potential more than makes up for it. The share price has grown over 180% in the last five years. Its consistent and dependable growth has also inflated its price, and it’s currently very expensive. But it’s still a super-safe stock to buy and can be instrumental for your portfolio’s growth.
If safety is the only thing stock is offering, it might not deserve a place in your investment portfolio. Growing dividends, a generous yield, and capital growth are all important things to look out for. And even if you are buying these safe stocks to anchor your portfolio against a market crash, the best time to buy them (especially the overvalued ones) would be the market crash itself.
Speaking of safe stocks...
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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.