3 TSX Stocks Analysts Recommend for Diversified Income

TSX stocks haven’t been doing well, but there are a few that analysts continue to peg as recession-proof stocks in strong industries.

| More on:
Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks

Image source: Getty Images.


A recession is likely for 2023, and analysts are already calling one out to investors. There are a few key pointers that keep creeping in, and one of those I have to say off the bat is keep invested. Now is not the time to take your money out of your investments while they’re down. It doesn’t do you any favours.

However, if you have cash available to invest, it can be a great time to get into the market. Especially if you consider defensive areas that should help you during a recession, but also out of one as well. So today I’m going to look at three TSX stocks analysts continue to recommend for a diversified set of income.

Infrastructure

Infrastructure is a solid option if you’re wanting protection during a recession, as well as growth in the future. Infrastructure is an essential part of our lives, making up our roads, sewers, and of course energy. That’s why one of the top TSX stocks you may want to consider is Brookfield Infrastructure Partners LP (TSX:BIP.UN).

Brookfield stock is a strong option as it not only invests in almost every type of infrastructure asset, but all around the world. So if you’re seeking out diversification, this is absolutely a strong way to get in on it. Brookfield stock also offers a 4.55% dividend yield as of writing, and trades at 2.4 times book value.

With shares down a whopping 14% year to date, it’s a great time to pick up this stock on the cheap. Then, you can look forward to a recovery during a potential recession, and most certainly on the other side of one.

Staples

Consumer staples are another area where investors want to look, but think big picture. Or maybe I should say think small. What are the materials that make up our everyday essential items? Your phone, your batteries, heck your plumbing! These materials will continue to be essential, which is why analysts believe they’re some of the TSX stocks to consider as well.

Basic materials are exactly what Teck Resources (TSX:TECK.B) focuses on. It mines for everything from silver and copper to the production of crop nutrients. If you need it, they have it. But what’s more, Teck stock has been doing incredibly well thanks to a recent sale that brought in significant cash. That’s strengthened its balance sheet to allow it to thrive through a recession and inflation.

And boy is Teck stock a deal. It currently trades at 6 times earnings, and 1 times book value. That’s even after climbing 41% year to date! Analysts continue to believe it has further to go, and they’re likely right if its historical performance is any indication. So this is definitely a great stock for diversification in basic materials for the next year or more at least.

Big Six Banks

I know, the banking industry doesn’t tend to do well in terms of share price when it comes to recessions. However, the Canadian markets tend to perform better than their United States counterparts, especially when it comes to banks. That’s because the Big Six Banks have provisions for loan losses, so investors don’t have to be too scared when these companies report lower loan growth.

But among the Big Six, Toronto Dominion Bank (TSX:TD) is a stellar choice. The company provides diversification in terms of its investments, be it wealth and asset management, loan options, or credit card partnerships. However, it’s also one of the biggest banks in the United States as well! So, you gain even more diversification from this one stock.

Among banking TSX stocks, it’s also one of the biggest. And yet shares haven’t collapsed like the others, providing you with some protection. TD stock is currently down about 6% year to date, which is also beating the TSX in general as well. So you can grab a deal while it trades at 9.3 times earnings, and lock in a 4.43% dividend yield before it bounces back.

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 positions in Toronto-Dominion Bank. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

Growth from coins
Stocks for Beginners

Got $5,000? These 2 Growth Stocks Are Smart Buys

Are you looking for some smart buys for your portfolio? Here are two great options to buy now while you…

Read more »

Young woman sat at laptop by a window
Stocks for Beginners

3 Stocks Beginners Can Buy in 2023 and Hold for Decades

Are you looking for a simple portfolio to get started as an investor? These three stocks are top performers and…

Read more »

railroad
Dividend Stocks

Slow and Steady: Buy this Railroad Stock Now to Win the Race

Investors looking for a solid and growing income should pick up shares in this railroad.

Read more »

A brown bear sitting on a rock
Stocks for Beginners

Where to Invest $10,000 in a Bearish Market

Here are some great options for low-risk and high-risk investors alike.

Read more »

retirees and finances
Dividend Stocks

RRSP Investors: Should You be Worried During a Recession?

RRSP savers might feel like gagging as they watch their investments fall, but stay strong! Especially with these TSX stocks.

Read more »

Businessperson's Hand Putting Coin In Piggybank
Stocks for Beginners

How I’d Build a TFSA if I Had to Start Over

Are you looking to start a TFSA? Here’s how I would build one if I had to start over.

Read more »

Stocks for Beginners

3 Top Stocks to Buy Now in a Once-in-a-Decade Opportunity

Don't wait. These three top stocks are the perfect additions to your portfolio and aren't likely to remain at these…

Read more »

retirees and finances
Dividend Stocks

How to Create a Million-Dollar TFSA in Two Decades

Your TFSA could create riches you didn't know were possible, but only if you commit again and again to your…

Read more »