During times of uncertainty, investors may become hesitant to jump into new positions. Currently, there is a lot of talk about a potential market crash. Whether it be from those following Warren Buffett or the investors that rely on technical analysis, there is certainly fear in among investors. In these situations, it would be a great idea to put your money towards more recession-resistant companies. In this article, I will discuss three Dividend Aristocrats investors should consider today.
This company’s struggles won’t last forever
The first company investors should consider is Fortis (TSX:FTS)(NYSE:FTS). The company is a leading provider of electric utilities in Canada, the United States, Central America, and the Caribbean. Founded in 1987, Fortis has been one of the most popular dividend companies in Canada for a long time. Its reliability has contributed in large part to this.
Among the Canadian Dividend Aristocrats, only one company claims a longer active dividend growth streak than Fortis. As of 2020, the company has managed to increase its dividend distributions for the past 47 years! This is very impressive considering the number of major market downturns we have experienced over that time.
Fortis stock has suffered since the start of the COVID-19 pandemic, still trading 12% below its all-time highs. However, the company has still managed to outperform the TSX over the past five years. During that time, the stock has gained 64.45% (dividends re-invested) compared to a gain of 45.34% for the TSX. This is one company that investors should consider before it jumps back to all-time highs.
The Canadian renewable energy industry has many top stocks
One thing that Canada should be proud of is how well it’s embraced the renewable energy industry. Currently, there are many top stocks listed on the TSX. I have written about Brookfield Renewable Partners many times previously. I still strongly believe that is a company that, both, growth and dividend investors should buy. However, to save another write-up on that company, I will discuss Innergex Renewable Energy (TSX:INE).
Innergex Renewable owns a portfolio of 75 assets consisting of hydroelectricity, wind, and solar energy facilities. All considered, its portfolio is capable of generating 3,694MW of power in Canada, the United States, France, and Chile. Currently, the company has several projects under construction, which would provide another 6,871MW of power.
Currently, Innergex Renewable claims a seven-year dividend growth streak. With a dividend yield of 2.37%, investors should consider this stock for any solid dividend portfolio. Even more impressive is the company’s growth over the past five years.
At a market cap of about $5.31 billion, Innergex Renewable is still much smaller than the large players in this industry. For example, Brookfield Renewable has a market cap of $16.2 billion and NextEra Energy is a staggering US$160 billion. Still, Innergex presents a very impressive growth opportunity. Over the past five years, the stock has grown 257.65%. This comes out to an annualized return of 29.01% over that period.
During times of market uncertainty, investors should turn to companies that are more recession resistant. Companies that operate in the utility sector will be leaned on regardless of the economic conditions. Fortis, Brookfield Renewable Partners, and Innergex Renewable Energy would therefore make excellent picks today.
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 Jed Lloren owns shares of Brookfield Renewable Partners. The Motley Fool recommends FORTIS INC.