The stock market has been doing well this year, even though the economy is still struggling and businesses are shutting down due to the pandemic. But that’s simply not sustainable over the long term, especially since even if the pandemic ends next year after a good chunk of the population is vaccinated, that doesn’t mean all the lost jobs will be back. The stock market is operating on borrowed time, and investors need to be very careful, because just like the market crash that happened in March, the next one could also happen with little warning.
However, investors can protect themselves by investing in recession-proof stocks where their businesses are relatively stable and that pay dividends to ensure that you’re earning some sort of a return along the way. Here are two stocks that are always safe buys to consider.
Top utility stock Fortis (TSX:FTS)(NYSE:FTS) hasn’t been generating any great returns this year, as its stock is down around 1%, underperforming the TSX and its 3% gains. But many investors have been busy buying up the hottest tech stocks and vaccine stocks, pushing them to all-time highs. That hasn’t left much attention on Fortis, which might explain why there’s been no love this year for this great long-term buy. But even with the slightly negative returns, you’d still be in the positive with Fortis, as the company pays a dividend that yields 3.8%.
After another dividend hike of 5.8% earlier this year, Fortis’s streak of consecutive annual increases is at 47. And the company still expects its dividend to grow by about 6% at least until 2025. And while many businesses are slashing expenses, Fortis announced this year that it would be increasing its five-year capital investment plan by $800 million from a year ago, budgeting for $19.6 billion. In its most recent earnings report, Fortis also netted a profit of $292 million, up from $278 million in the same period last year. With solid financials and a great dividend, this is one of the safer stocks you can put in your portfolio and forget about.
Another safe investment option is vitamin maker Jamieson Wellness (TSX:JWEL). Healthcare has been a popular sector to invest in this year, and that’s helped Jamieson become one of the better buys on the TSX in 2020, with its share price rising more than 30% thus far. Its dividend is a bit more modest, yielding just 1.4%, but it can still help pad your overall returns from owning the stock.
The company is seeing strong growth this year, as people are spending more on healthcare in the wake of the pandemic. In the third quarter ending Sept. 30, Jamieson reported revenue of $105.6 million, which was a 19.2% increase from the prior-year period. Its net income was $12.1 million and more than double the $4.9 million profit it recorded during the same period last year. Jamieson also raised its revenue guidance for the year, now expecting its top line to come in as high as $400 million, which would be 16% higher than it was in 2019.
Jamieson’s business is doing well, and there’s little reason to worry about this stock over the long term.
Here are some more great stocks to consider:
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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.
Fool contributor David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.