If you are worried that the bull market will end soon, you aren’t alone. The massive rally in equities despite the weak economic trajectory is leading many to believe that the stock market could crash in 2021.
Whether the market would crash or not remains to be seen. However, we can certainly prepare our portfolio for the next crash. Here are three such top TSX stocks that should be a part of your portfolio before the market crashes again.
Speaking of stocks to buy before the market crashes again, consider buying the shares of Kinross Gold (TSX:K)(NYSE:KGC). Kinross Gold stock is likely to add much-needed protection to your portfolio. Moreover, higher demand for the yellow metal amid the market turmoil could lead to a rally in the shares of Kinross Gold.
Besides being a top defensive bet, Kinross Gold stock attracts on the valuation front. The gold mining company trades at a forward EV/EBITDA multiple of 3.7, which reflects a significant discount of 36% to its peer group average of 5.8. Meanwhile, its forward P/E multiple of 7.8 is also lower than the peer group average of 13.5.
Notably, Kinross Gold’s production is expected to increase over the next three years. Meanwhile, its cost is projected to go down, which is likely to boost its margins and support the uptrend in its stock. Also, the company has reinstated its dividends and offers a decent dividend yield of 1.7%.
With 99% of its earnings coming from the high-quality regulated utility assets, Fortis (TSX:FTS)(NYSE:FTS) is a top stock to own before the next market crash. The company’s regulated utility assets generate predictable and growing cash flows that support its growth and drive its robust dividend payouts.
Meanwhile, healthy rate base growth and continued investment in growth opportunities, including infrastructure, acquisitions, and renewable power, should help the company to deliver high-quality earnings over the next decade. Fortis projects its rate base to increase at a compound annual growth rate (CAGR) of 6% over the next five years. Moreover, its annual dividends are projected to grow at a similar rate in the coming years.
Fortis’ low-risk business, strong cash flows, and solid dividend yield makes it a must-have stock in your portfolio.
Speaking of top defensive bets, consider buying the shares of Alimentation Couche-Tard (TSX:ATD.B). The retailer has consistently performed well and generated stellar returns irrespective of the economic situation, thanks to its strong underlying business, accretive acquisitions, and growing retail footprint.
With its low-risk business and continued demand for its products and offerings, Alimentation Couche-Tard could continue to deliver healthy growth while reducing the downside risk in your portfolio.
The retailer’s global footprint, growing scale, and cost discipline are likely to support its sales and earnings, in turn, its stock. Meanwhile, Alimentation Couche-Tard continues to boost its shareholders’ returns through higher dividend payments.
Alimentation Couche-Tard’s dividends have increased at a CAGR of 26.6% since 2011. Meanwhile, it recently increased its quarterly dividend by 25%.
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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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends ALIMENTATION COUCHE-TARD INC and FORTIS INC.