Worried About a Market Pullback? 2 Defensive Stocks You Can Buy

Buy Alimentation Couche-Tard and Loblaw stock to reallocate your portfolio for a defensive position against market volatility.

| More on:

The second week in March showed that equity securities rebounded well after a slightly choppy beginning to the month. Regardless of the slight improvement, investors should be prepared for a market pullback.

I want to discuss two defensive stocks to buy today if you are worried about market volatility in 2021.

Retail giant

Alimentation Couche-Tard (TSX:ATD.B) is an excellent stock that you could consider adding to your portfolio as a strong defensive pick. The company operates and licenses convenience stores worldwide. The defensive stock declined by almost 17% between January 4 and January 14, 2021.

The stock has been on a positive trend since its decline at the start of the year. Its valuation climbed by 13% between January 14 and March 11, 2021. Shares of the company have climbed 2.76% month over month at writing.

The company has not yet released its latest fiscal 2021 results, but its previous quarter showed positive news. The company delivered total merchandise and services revenue of $3.8 billion — up 6.3% from the same period last year. Its net revenue rose to $757 million compared to $578 million in the previous quarter.

Alimentation also boosted its quarterly dividend to $0.087 per share, representing a modest 0.86% dividend yield. Alimentation could be a pillar of stability and reliability for your portfolio during a market pullback due to the essential nature of its service.

Grocery giant

Loblaw (TSX:L) is the most significant grocery retailer in the country. Grocery space stocks make for excellent defensive investments, and it seems that investors have really taken an interest in the stock of late.

Loblaw was down 4.53% between January 4 and February 24, 2021. The stock began March on a better note, soaring by 8.61% between February 24 and March 11, 2021. The company’s sudden surge came after its last batch of 2020 earnings results on February 25, 2021.

The report showed that its revenue rose 7.1% from the same period last year to $12.4 billion. The company’s e-commerce sales surged 160%, as consumers moved to digital channels amid the pandemic. Loblaw’s adjusted EBITDA rose to $1.26 billion, translating to a 5% increase year over year.

Grocery retailers proved excellent investments during the last pullback. Loblaw’s quarterly dividend of $0.335 per share represents a 2.03% yield at writing, and it could be an attractive investment to consider.

Foolish takeaway

While many analysts predicted that another market pullback would come before 2020 ended, the fears of one happening are still there this year. If a market pullback happens, it would be wise to position your portfolio to deal with the volatile market conditions. Investing in the likes of Loblaw and Alimentation Couche-Tard could be an ideal way to begin.

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 owns shares of and recommends ALIMENTATION COUCHE-TARD INC.

More on Dividend Stocks

RRSP Canadian Registered Retirement Savings Plan concept
Dividend Stocks

Watch Out! This is the Maximum Canadians Can Contribute to Their RRSP

We often discuss the maximum TFSA amount, but did you know there's a max for the RRSP as well? Here's…

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

Outlook for Fortis Stock in 2025

Fortis stock is up 10% in 2024. Are more gains on the way?

Read more »

Canadian energy stocks are rising with oil prices
Dividend Stocks

3 Low-Volatility Stocks for Cautious Investors

As uncertainty grips the market, here are three low-volatility stocks you can buy and hold with confidence.

Read more »

sale discount best price
Dividend Stocks

Time to Buy! 1 Dividend Stock That Hasn’t Been This Cheap in Years

This dividend stock provides practically everything: a stable income stream, steady occupancy rates, and more growth to come.

Read more »

jar with coins and plant
Dividend Stocks

The Smartest Dividend Stocks to Buy With $2,000 Right Now

Given their stable cash flows and consistent dividend growth, these two dividend stocks are ideal additions to your portfolios.

Read more »

Muscles Drawn On Black board
Dividend Stocks

Canadian Defensive Stocks to Buy Now for Stability

Two TSX defensive stocks offer capital protection and stability for risk-averse investors

Read more »

worker carries stack of pizza boxes for delivery
Dividend Stocks

Monthly Dividend Leaders: 3 TSX Stocks Paying Dividends Every 30 Days

These TSX stocks offer monthly dividends and attractive yields of more than 7%, making them top stocks for passive income.

Read more »

bulb idea thinking
Dividend Stocks

The Smartest Dividend Stocks to Buy With $3,000 Right Now

Do you have $3,000 and are wondering how to generate some extra income? These three dividend stocks present attractive value…

Read more »