Many investors fear a market crash, while others consider it an excellent opportunity to purchase high-quality stocks on the cheap. The possibility of another stock market crash is very real, and investors looking at it as an opportunity might prepare for it by increasing their liquidity. However, income investors could see their investments’ value drop and dividend payouts slashed during a market crash.
Remember that stock market investing is generally considered risky. If you are investing with a long-term investing horizon, you should not hesitate in picking defensive names over the popular names. Holding dependable stocks that can pay you virtually guaranteed dividends can help you find a good place to park your capital.
If the situation turns out well enough, you could use some of the cash to purchase high-quality stocks for a bargain. You might not have to see panic fuel your decisions if your cash is stashed in the right assets.
The goal is to look for businesses that can last through the pandemic and continue performing well for decades. BCE is a company that can outlast COVID-19 and generates increasing revenues over the years. The country’s largest telecom operator provides an essential service that its customers continue using during the pandemic.
It continues generating consistent returns due to its wireless, wireline, and media operations. The telecom also dominates the telecom sector with only Rogers Communications and Telus as the other significant companies in the industry.
BCE’s launch of Bell 5G earlier this year boosted its revenue, and its 5G rollout could extend to 100 centres countrywide.
Fortify your portfolio’s defence
Fortis is a staple asset that you will likely find in all kinds of investment portfolios. Capital protection stocks do not get better than Fortis. The utility operator provides regulated natural gas and electric services to its customers across Canada, the U.S., and the Caribbean. The nature of its business allows Fortis to continue generating revenue regardless of the economic conditions.
Fortis is a Canadian Dividend Aristocrat that many investors consider one of the most defensive investments they can have in their portfolios. The utility company has an impressive 47-year dividend-growth streak. Even the market crash of 2008 could not deter the company from increasing its dividend payouts.
The company continues to generate predictable revenue due to its highly regulated income. Its cash flows allow the company to invest in improving its operations and comfortably finance its increasing dividends.
BCE is trading for $58.46 per share, and Fortis is trading for $52.74 per share at writing. The stocks have a 5.70% and 3.83% dividend yield, respectively, at the current valuation. I think that Fortis and BCE could make valuable additions to your portfolio.
The reliable dividends can provide you with passive income in your Tax-Free Savings Account. You can even reinvest the payouts to unlock the power of compounding, so you can become a much wealthier investor.
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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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC, ROGERS COMMUNICATIONS INC. CL B NV, and TELUS CORPORATION.