Those worried about a potential market correction or crash certainly have reason to view the markets in a skeptical way.
Indeed, valuations are nearing all-time highs on various metrics. And some investors are rightly becoming concerned with just how steeply valued the market is right now relative to historical levels.
On this basis, the search for value stocks is on. Here are two of the top value stocks on the TSX right now.
Battle a potential market crash with Fortis
Perhaps no better stock is suited to long-term, defensive portfolios than Fortis (TSX:FTS)(NYSE:FTS). Indeed, this utilities player has proven itself to be a cash flow growth machine over the past five decades. And investors who have held this stock have continued to benefit from impressive long-term total returns over time.
As investors know, one of the key components of total return is dividend income. Indeed, in this regard, Fortis is one of the best TSX stocks. The company’s dividend-growth track record is truly insurmountable, with the company providing dividend increases each and every year for nearly five decades. These dividend increases have been made possible by Fortis’s extremely reliable cash flows and stable business model. Accordingly, this is as defensive a pick as investors can choose right now.
Indeed, knowing that a (growing) dividend will arrive each and every year provides investors with downside protection. In bad times, investors are able to pick up higher yields with such stocks. In good times, capital appreciation should make up for a relatively smaller yield.
Over time, Fortis is a compounder with excellent fundamentals and growth prospects. This is a top pick every investor should consider for a retirement portfolio today.
Barrick Gold another great defensive pick
What’s more defensive than gold?
Indeed, for investors in gold miners like Barrick Gold (TSX:ABX)(NYSE:GOLD), such defensiveness is the key to holding this volatility combatant. Barrick’s long-term growth trajectory has been as volatile as the price of gold. However, of late, gold has steadied at higher levels, boosted by inflation concerns and increasing monetary stimulus, which has driven the price of gold toward the US$1,800-per-ounce level of late.
For those who believe gold could be headed much higher, miners like Barrick are great picks today. These miners provide leverage to the price of gold and act as a safe haven in times of uncertainty. Last year, gold miners were among the best-performing assets when the market was crashing. For those worried about the potential for an even worse crash, such stocks could outperform in this type of scenario.
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 Chris MacDonald has no position in any stocks mentioned in this article. The Motley Fool recommends FORTIS INC.