Different investors have different approaches to their portfolios. To some, it’s always about the right opportunity. They would buy the best possible deals available in the market at any given time and stick to them as long as they are adequately profitable. Others have favourites — time-tested stocks that they keep investing in whenever they are adequately discounted or offer a good value.
If you are the second type of investor, you may like to know about the three stocks I keep buying whenever they fall.
A renewable energy and utility stock
Renewables are the future, and even though the initial hype surrounding stocks like Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) may have waned, the stock might have the potential to steadily go up in the long run. Its business model, which combines the stability of a utility stock and the future potential of renewable power generation, makes it an inherently safe investment.
But the fact that it offers sustainable growth potential and generous dividends makes it a stock you might consider buying whenever it’s at a discount. An example would be now, when it’s trading at a 17% discount from its 2021 peak, and its dividend yield is up to almost 5%. The current valuation is just above fair and may become more attractive if the stocks dip.
A tech stock
The tech sector is full of volatile growers, but it also has companies like Open Text (TSX:OTEX)(NASDAQ:OTEX), which is a comparatively steady grower — at least it has been one in the last decade. Its core product is information management, and, in this age, when businesses are truly harnessing the power of data, that’s a thriving market segment to be in.
The stock has mostly gone up in the last two decades, and it may have the potential to keep going up at a steady pace for the next couple of decades as well.
It returned over 260% to its investors in the last decade through price appreciation alone, and if you add the dividends to the total returns, the number becomes even more impressive. Another reason to like the company is that it’s one of the few Dividend Aristocrats in the tech sector.
A real estate stock
FirstService (TSX:FSV)(NASDAQ:FSV) is the clear leader when it comes to residential communities management in North America. Its massive portfolio is composed of over 1.7 million individual housing units. That’s almost 1% of the entire housing stock in the U.S. and Canada combined.
This puts the company in a powerful position. And since it’s a relatively stable business, this model also grants FirstService a lot of financial safety. But it’s just one half of the company’s business. The other half comes from essential services. Under this umbrella, the company owns seven different brands and a network of over 1,500 locations (mostly franchises, some company owned).
And this market leadership comes with powerful growth potential. Apart from the massive post-pandemic correction from which the stock has just started to recover, it has mostly gone up since its inception. It’s also an aristocrat, but the yield is usually below 1%, even if the stock is dipping.
One of the best times to buy your favourite companies is the market crash. That’s when you are reasonably sure that it’s the market bringing the stock down — not something specific to the company. The next best time is when the sector as a whole is falling. But if the market and the industry are stable, and only the stock is going down, you should reconsider your entire position in the company.