3 Perfect TSX Stocks to Fight Off Recession Fears

These TSX stocks are perfect for those wanting companies that can cover themselves in a recession but provide you with growth for now.

Woman has an idea

Image source: Getty Images

Motley Fool investors should know there’s no such thing as a perfect stock. But when it comes to the TSX today, there is so much risk. What you want are to find companies with low risk and that won’t all of a sudden collapse.

And many companies could collapse in the coming months. Should a recession happen, shares of companies across the board could fall. It’s already happened with riskier industries like tech, never mind something like cannabis. Today, I’m going to focus on three TSX stocks that will help ease your mind over a potential recession.

Suncor Energy

Suncor Energy (TSX:SU)(NYSE:SU) is a solid company for those looking to see gains from the rebound in the oil and gas sector as well as solid passive income. And I do mean solid. The company slashed it back in February 2020. Since then, it’s been slowly climbing back up, creating both passive income and growth.

Furthermore, the company has been doing well compared to TSX stocks when it comes to investing its cash. It currently has a debt-to-equity (D/E) ratio of just 0.56. It trades at 11.74 times earnings and offers a 3.69% dividend yield. Shares are up 58% year to date, almost reaching heights not seen since 2018.

CGI Group

Tech stocks in general have no fared well among TSX stocks, but not all of them should be off your buy list. While you won’t see a dividend come in from CGI Group (TSX:GIB.A)(NYSE:GIB), it offers stable growth. That growth has come from acquiring software companies in a strategy that is jaw dropping in its precision.

CGI stock currently has a strong balance sheet, offering a D/E ratio of just 0.65. The downside is it trades at 17.01 times earnings. But still, compared to other tech stocks that is still within value territory. Further, analysts peg it at a huge rebound, with a potential upside of about 26% as of writing.

Teck Resources

If you want to get into something that will practically always recover, its materials and construction TSX stocks. We will always need to build things, and usually after a recession, there is a boom in this industry. Supply-chain demands have been hurting it, but a recession and inflation has brought it back down to reality. That leaves an opportunity open for long-term holders.

That’s why I like Teck Resources (TSX:TECK.B)(NYSE:TECK). The company explores, produces, and develops mining in industrial products and materials such as steal, copper, and silver. These will see especially strong growth in the next decade, as much of this will be needed with the transition to renewable energy.

What’s more, Teck stock offers a D/E ratio of 0.39, and a P/E ratio of 6.89, putting it well within value territory and enough to cover itself during a potential recession. It offers a slight dividend at 0.98%, but that’s better than $0! Shares are also up 42% year to date.

Bottom line

These TSX stocks may not be the most exciting, but they are some of the most stable out there. Furthermore, each has actually seen gains this year compared to many others that continue to drop. So, if you want safety and stability with the potential for superb growth out of the recession, consider these three TSX stocks today.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends CGI GROUP INC CL A SV.

More on Stocks for Beginners

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

TFSA Income: 3 Canadian Dividend Stocks to Hold for a Lifetime

Looking for passive income that lasts? These three dividend stocks offer some of the best long-term growth opportunities, and dividends…

Read more »

Silver coins fall into a piggy bank.
Stocks for Beginners

Why Dollarama Stock Keeps Going Up

Dollarama stock (TSX:DOL) continues to climb, with shares up 35% in 2024 alone. But does that mean the best has…

Read more »

Various Canadian dollars in gray pants pocket
Stocks for Beginners

4 Stocks Under $50 New Investors Can Buy Confidently

These four stocks are some of the best options for new investors, with share prices under $50 that anyone can…

Read more »

exchange traded funds
Stocks for Beginners

What’s the Best Way to Invest in Stocks Without Any Experience? Start With This ETF

This BMO ETF is a great way to kick-start a diversified beginner investment portfolio.

Read more »

exchange traded funds
Stocks for Beginners

What’s the Best Way to Invest in Stocks Without Any Experience? Start With This Index Fund

One of the best ways to invest in stocks without any experience is through investing in a market-wide fund.

Read more »

Investor wonders if it's safe to buy stocks now
Stocks for Beginners

Waiting for a Market Pullback With the S&P 500 at All-Time Highs? Here’s Why You Probably Shouldn’t

The S&P 500 may still be climbing past all-time highs, but that doesn't necessarily mean you should be sitting on…

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

This 6.5% Dividend Stock Pays Cash Every Month

This dividend stock with a 6.4% dividend yield could be your long-term ticket to financial freedom on a monthly basis!

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

3 Growth Stocks That Could Make You Richer in 2024

These three growth stocks are climbing higher and higher, but there is certainly more to come for these companies.

Read more »