Is economic trouble ahead, as evidenced by the stock market’s downtrend lately? The TSX ended higher from the previous day to start the last quarter of 2021. However, the 20,150.87 closing on October 1, 2021, was the fourth consecutive week of losses. Canada’s primary index has declined 3.22% since posting a record high of 20,821.40 on September 3, 2021.
We’re witnessing the continuing erosion of the market’s year-to-date gains. The last time the TSX finished below 20,000 was on July 20, 2021. Nevertheless, some stocks display resiliency amid the unpredictable environment.
The Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM) outperforms the broader market, while Emera (TSX: EMA) in the utility sector is stable as ever. They are the top stocks to buy if you want income stability in a falling market.
New branding
Risk-averse investors shouldn’t think twice about investing in CIBC today. The bank stock is up 34.99%, the second-highest performer among the Big Banks so far in 2021. At $ 142.18 per share, the dividend yield is 4.14%. The earnings results of Canada’s fifth-largest bank after three stellar quarters in fiscal 2021. fiscal 2021, net income even increased by more than 300% versus Q2 fiscal 2020.
Apart from the impressive net income growth notwithstanding the pandemic, CIBC’s 153-year dividend track record makes it a buy-and-hold stock. On September 23, 2021, the $63.99 billion bank unveiled a new logo. According to management, it’s the culmination of CIBC’s broad transformation in recent years.
CIBC President and CEO Victor Dodig said, “Since our founding more than 150 years ago, CIBC has worked to deliver exceptional client experiences, never more so than today as we build a relationship-oriented bank for the modern world.” Management wants to send a message that the new branding unites legacy with the future.
Dodig said, “Our renewed purpose has been our north star throughout this time, and as we look to the future.” He adds that it’s more important than ever that the brand captures what the bank is today. CIBC has a North American platform for growth, a client-centric culture, and a focus on the future for its stakeholders.
Dividend growth
Emera boasts high-quality utility assets in North America consisting of seven energy-focused, regulated operating firms and two unregulated investments. It isn’t as old (23 years) as CIBC, but it offers capital protection as the business model is recession-resistant.
The $14.73 billion electric company derives 90% of regulated assets, namely electric utilities, gas LDCs. Emera also owns an unregulated gas-fired generation asset in North America. With power demand forecast to double to triple in the next five years, it’s an excellent time to own this utility stock.
Current investors enjoy a nearly 10% year-to-date gain. At $57.43 per share, the dividend offer is 4.44%. Likewise, dividend growth is on the horizon. With its $7.4 billion capital investment plan (2021 to 2023), management expects the rate base to grow between 7.5% and 8.5% in three years. Hence, the annual dividend growth target of 4% to 5% through 2023 is achievable.
Start of a bear market
This month could see the end of TSX’s 2021 bull run. However, CIBC or Emera investors should feel secure. Both companies are resilient and have endured severe downturns. They have kept investors whole on dividend payments even in a falling market.
