The Motley Fool

Growth or Defence: What Are the Best Stocks to Buy Right Now?

Image source: Getty Images

In today’s investing environment, it can be difficult to decide which are the best stocks to buy right now.

On the one hand, the market is forward looking, and almost everyone expects a big recovery this year. On the other hand, unemployment is still sky high, and there is a long road to a healthy economy. So, it isn’t easy to figure out what the best stocks to buy right now are.

In general, the market is forward looking, so that’s how investors should be positioning their portfolios. However, during times of heightened risk and uncertainty, overexposing yourself to high-risk growth stocks could be disastrous.

For that reason, investing in today’s landscape is extremely tricky. Investors have to navigate the fine line of finding high-potential growth stocks without taking on too much risk in their portfolios.

While most investors may decide to own a fair amount of both defensive and growth stocks, a couple of high-quality Canadian stocks offer exposure to both. These are some of the best stocks to buy right now.

A top Canadian utility to buy today

One of the best stocks to buy right now is Algonquin Power and Utilities (TSX:AQN)(NYSE:AQN). Algonquin offers investors an attractive combination of both robust earnings and significant long-term growth potential.

Its utilities segment makes up about 65% of its business. It’s well diversified, operating in over 10 states and offering gas, electricity, and water services.

As many investors know, utilities are one of the most defensive industries. So, with two-thirds of Algonquin’s business coming from its robust utilities segment, it’s an incredibly stable long-term stock.

This makes it one of the best stocks to buy right now, where risk and uncertainty remain high. These stable operations also underpin Algonquin’s dividend, which yields roughly 4%.

The other third of its business is its renewable energy and power-generation segment. Renewable energy is one of the top long-term growth industries there is. So, in addition to its stable utilities business, Algonquin has a tonne of long-term growth potential.

This incredible combination of growth and defence makes Algonquin an ideal stock to buy today.

The best gas stock to buy right now

Another top stock for this environment is AltaGas (TSX:ALA). AltaGas is one of the best stocks to buy right now for many of the same reasons as Algonquin.

The company also has a highly resilient utilities segment. This is crucial, as it’s also the segment that underpins AltaGas’s operations with stable and consistent cash flow.

In the fourth quarter, its utilities segment saw essentially flat year-over-year growth in its operating income. It’s midstream segment, however, which is more cyclical, saw a 28% decline in operating income as a result of the pandemic.

This is just a minor short-term impact, but it goes to show how important it is that AltaGas’s utilities are resilient. And as the market recovers, its midstream segment offers AltaGas a tonne of long-term growth.

Just like Algonquin, AltaGas’s combination of growth and defence makes it one of the best stocks to buy right now. It even pays a 5% dividend.

So, if you’re looking for a top stock to buy in today’s investing environment, I’d start with these two.

If your looking for even MORE GREAT STOCKS TO BUY TODAY, here is a FREE LIST of the TOP 10 FOR MARCH!

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More 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 Daniel Da Costa owns shares of ALGONQUIN POWER AND UTILITIES CORP. The Motley Fool recommends ALTAGAS LTD.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.