The pandemic came along to prove to us that there is no equity security entirely immune to the effects of a market crash. Some companies can provide you with some level of protection against volatility in the stock market. However, it is impossible for businesses to face no adverse impact from industry headwinds or industry-specific issues.
The best thing you can do is to look for assets that have the potential to rapidly recover from volatile market conditions. The temporary dips do not impact the long-term returns that these high-quality stocks offer, making the companies ideal to add to your investment portfolio.
If you are just starting investing in the Canadian stock market, finding the right stock picks as foundations for your portfolio could set you up for life. You can invest in the shares of these high-quality companies and forget about your investments until you retire to enjoy stellar returns from these assets as a much wealthier investor.
Scotiabank
The Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) belongs to the Canadian banking sector, a favourite industry of many investors with a long investment horizon. While you can never go wrong with investing in any of the banking stocks, Scotiabank is a particular stock that beginner investors should consider adding to their portfolios.
The banking sector is not known for offering prolific capital gains. However, the Canadian Dividend Aristocrat offers substantial upside potential due to its growing geographic presence. The bank has established a foothold in the growing economies in the Pacific Alliance, namely Peru, Mexico, Chile, and Columbia.
The countries are expected to deliver stronger growth than G7 countries in the coming years, making the market a very lucrative opportunity for Scotiabank.
Trading for $78.65 per share at writing, it offers a juicy 4.58% dividend yield that can continue growing your wealth steadily over the years.
Pembina Pipeline
Pembina Pipeline (TSX:PPL)(NYSE:PBA) belongs to the Canadian energy sector, an industry that has been riddled with uncertainty in recent years. The energy industry has been on a rollercoaster, especially during 2020 and 2021. While it is true that there is a growing demand to shift toward renewable energy, oil and gas are not going away for several decades.
Pembina Pipeline is a business that relies on transporting commodities produced by the energy industry, allowing it to generate relatively more stable returns compared to its peers. The company does suffer from volatile oil prices, but the nature of its business offers it a layer of protection during tough market conditions.
PPL has managed to retain its strong dividend growth streak despite all the challenges that befell the industry and it continues to be an ideal asset for long-term investors. Trading for $41.39 per share at writing, PPL boasts a juicy 6.09% dividend yield.
Fortis
Fortis (TSX:FTS)(NYSE:FTS) belongs to one of the most reliable sectors in the Canadian economy: utilities. The utility holdings company owns and operates several electric and natural gas utility businesses, providing these essential services to around 3.4 million customers across Canada, the U.S., and the Caribbean. The business provides a service that everybody needs, making its income secure.
Fortis generates most of its revenues through rate-regulated and contracted assets that virtually guarantee predictable income. The company’s management can use its predictable cash flows to comfortably fund its expansion and its growing shareholder dividends.
Fortis boasts a 47-year dividend growth streak, making it one of the best Canadian Dividend Aristocrats to consider and an ideal stock that can set you up for life.
Trading for $56.16 per share at writing, it boasts a juicy 3.60% dividend yield.
Foolish takeaway
Scotiabank stock, Pembina Pipeline stock, and Fortis stock offer an ideal combination of long-term capital gains and reliable dividends. Suppose that you buy and hold shares of the three companies in your investment portfolio with a dividend reinvestment plan.
In that case, you could generate enough returns in your portfolio by the time you retire that you might end up with a sizeable retirement nest egg for a comfortable retirement.
