Wherever the Market Goes, I’m Buying These 3 Big TSX Stocks

There are plenty of TSX stocks that offer decent growth potential and are less volatile than broader markets.

| More on:
Woman has an idea

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Do you think it’s worth it to lose peace of mind to achieve a higher return of a few percentage points? There are plenty of TSX stocks that offer decent growth potential and are less volatile than broader markets. Your portfolio could create massive wealth in the long term.

Fortis

Top utility stock Fortis (TSX:FTS)(NYSE:FTS) is one of the most stable stocks on the Toronto Stock Exchange. It pays stable dividends and currently yields 3.7%. Although the yield is not that superior, it dons a long dividend increase streak of 47 straight years.

Notably, the $26 billion company will most likely continue to do the same for years. Fortis intends to raise dividends by 6% annually through 2025.

Fortis generates almost entire of its earnings from regulated operations. These operations allow achieving a specific rate of return which provides earnings visibility. This, in turn, minimizes investor risk substantially. Fortis aims to invest $19.6 billion in such low-risk regulated operations through 2025.

Utilities like Fortis pay a large slice of profits to shareholders as dividends. In the last five years, Fortis paid on average 70% of its net income as dividends, way higher than the broader market average.

Fortis can be a super defensive stock for your portfolio as markets currently trade around all-time highs. Its low volatility, decent dividends, and stable earnings growth make it attractive for long-term investors.

TC Energy

It’s comforting to see robust dividends coming in every month or every quarter. Top midstream energy company TC Energy (TSX:TRP)(NYSE:TRP) pays handsome dividends and yields 6% at the moment. That’s far superior to TSX stocks at large.

TC Energy operates a large network of oil and gas pipelines that connects energy producers and refiners. Apart from midstream, the company runs a power generation plant as well. Both these verticals facilitate stable earnings and, ultimately, stable dividends.

TC Energy has increased its dividends for the last 21 consecutive years. Notably, it intends to raise payouts by around 6% for the next few years. Driven by handsome dividends, TC Energy stock has delivered an average annual return of 12% since 2000, significantly beating the TSX Composite Index.

BCE

Canada’s telecom giant BCE (TSX:BCE)(NYSE:BCE) is my top pick to play the 5G rally. It has been aggressively investing in network improvements this year. Under its biggest capital spending plan so far, it plans to provide 5G coverage to approximately 70% of the Canadian population in 2021.

With approximately 10 million subscribers, BCE is the second-largest telecom company in the country. It has a robust balance sheet to invest in capital projects and expand in the next few years. Thus, BCE looks relatively well placed among peers to ride the upcoming 5G wave.

BCE stock yields a handsome 6% at the moment. Driven by its stable earnings, BCE continued to increase shareholder payouts during the pandemic as well. Investors can expect its dividend growth rate to accelerate, fueled by superior earnings growth potential in the next few years.

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 Vineet Kulkarni has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.

More on Investing

edit Sale sign, value, discount
Investing

3 Cheap TSX Stocks to Buy Before July

Canadian markets have bounced back, but investors can still snag undervalued TSX stocks like Finning International Inc. (TSX:FTT).

Read more »

thinking
Investing

Is Blackline (TSX:BLN) Stock Worth Your Attention in 2022?

Blackline Safety Corp. (TSX:BLN) stock has struggled in the year-over-year period, but there are some positives to glean from its…

Read more »

stock analysis
Investing

Why I’m Buying the Dip in Andlauer (TSX:AND) Stock

Andlauer Healthcare Group Inc. (TSX:AND) stock offered exposure to two promising spaces while offering solid value in late June.

Read more »

clock time
Tech Stocks

Now’s the Time to Load Up the TFSA With These 2 Top TSX Stocks

Here are two top TSX stocks that long-term growth investors may not want to give up on, especially at these…

Read more »

data analyze research
Energy Stocks

TSX Stock Picks With Huge Potential

If you want a TSX stock that's bound for even more strong growth, these three are top picks by analysts.

Read more »

growing plant shoots on stacked coins
Investing

Market Plunge: Double Your Cash With 3 Bargain Stocks

These TSX stocks have corrected over 50%, despite their strong fundamentals, and could easily double from here.

Read more »

oil and natural gas
Energy Stocks

Can Cenovus Stock Outperform in H2 2022?

Is now the time for investors in Cenovus (TSX:CVE)(NYSE:CVE) stock to buy more, or wait out this volatility right now?

Read more »

cup of cappuccino with a sad face
Investing

The Biggest Regret a TSX Investor Can Have

Hydro One (TSX:H) is a top bond proxy to own if you're a TSX investor who's worried about a pick-up…

Read more »